Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am pleased to have this opportunity to brief the House on the outcome of last week's European Council meeting in Brussels on 22 and 23 November. The main item for discussion at the meeting was the Union's multiannual financial framework, MFF, its budget for the period 2014-20. As the House will recall, negotiations on the MFF have been underway since the European Commission put forward proposals in June of last year. These negotiations have been highly complex and contentious. Last week's European Council meeting ended without the member states reaching agreement. Nevertheless, I am confident that a deal can be reached before too long.

On 13 November President Van Rompuy put forward a compromise proposal for discussion at the November European Council. This proposal contained a range of cuts for all headings of the MFF, with the greatest cuts to be applied in agriculture and cohesion spending. This was seen by some member states as cutting too deeply, and by others as not cutting enough. As far as we were concerned, it cut too deeply into the CAP. Prior to the meeting of the European Council, I spoke to a number of my counterparts, including UK Prime Minister Cameron and French President Hollande, to make Ireland's concerns clear and to hear their priorities and their appreciation of the state of negotiations.

Throughout Thursday, 22 November, before the European Council meeting commenced, President Van Rompuy, accompanied by Commission President Barroso, met bilaterally with each of the members of the European Council to get a feel for the priorities with which each was approaching the table. I made a number of points to President Van Rompuy when I met him. First, I told him that the challenges posed by Ireland's particular economic situation make a pro-growth EU budget essential. Second, I made it quite clear to him that the Common Agricultural Policy is Ireland's most important financial priority in the MFF negotiations. We get the bulk of our EU receipts from this heading. I told him that we could not accept the cuts that he had proposed. Third, I told him that cohesion policy should reflect the current economic situation in EU regions, in particular the levels of unemployment. Finally, I put a strong case to him for maintaining the PEACE programme, which has played an important role in helping to sustain peace on this island. President Van Rompuy listened carefully and took the views I expressed on behalf of Ireland on board.

On foot of his bilateral meetings with Members of the European Council, he made a revised proposal on Thursday evening. This maintained the same level of overall cuts to the overall budget but with the balance shifted in that greater levels of funding were suggested for agriculture and cohesion. Cuts were proposed to expenditure relating to infrastructure, research, and external action, all of which are important priorities in themselves. There is strong pressure on the funding available under heading two for the CAP. That downward pressure was reflected in the Commission's initial proposal, which represented a real decrease of about 7% from the current framework. The trend continued in the proposal made by President Van Rompuy on 13 November, ahead of the summit, which removed a further 6.2%, or €25.5 billion, from the equation. However, as a result of the strong and assertive lobbying by Ireland and like-minded member states, I believe we are turning things around. Some of the ground was made up in the proposal which President Van Rompuy put to the meeting last Thursday.

Of course, his proposal was not agreed and, therefore, we can take nothing for granted. As is always the case, nothing is agreed until everything is agreed but it shows that the negotiations are moving in the right direction. We are now closer to where we want to be but we are not there yet. We will keep the pressure up. We will continue to work closely with those member states which support our position and we will continue to make our case. The CAP is a forward looking and growth oriented policy. It is one of the truly common policies of the Union. It must be properly funded into the future. The food area remains the largest manufacturing sector in the Union in terms of employment.

Discussion took place among the members of the European Council on the evening of the 22nd and then again on the 23rd. I made Ireland's position on the MFF, and the CAP in particular, very clear to our EU partners. The House will recall that we have consistently called for the EU's budget to have the right mix of priorities, a fair allocation of resources and a focus on jobs and growth. We have called for the to be CAP adequately funded to support a vigorous, consumer focused agricultural production base in Europe and a vital tool for economic growth. We have called for an EU budget that has adequate resources for other growth enhancing measures, including research, education, European connectivity and support for the SME sector. Other member states similarly put forward their views on the MFF at the meeting.

Unfortunately, the meeting ended without agreement. A short statement was agreed, which gave President Van Rompuy and President Barroso a mandate to continue work on the MFF and consult with member states in the coming weeks to find consensus on the MFF. The statement noted that the bilateral meetings with President Van Rompuy and the constructive discussion within the European Council showed a sufficient degree of potential convergence to make agreement possible in the beginning of next year and expressed confidence that the existing divergence of views could be bridged. It is, of course, disappointing that the European Council ended without reaching agreement. Nevertheless, I feel that progress was made and that the meeting was useful in a number of respects. First, the meeting took place in a constructive atmosphere. Member states made their positions clear without acrimony and were able to agree the statement without difficulty. There is no prospect of lack of agreement on the budget distracting from the important work of next month's meeting of the European Council at which President Van Rompuy will present his proposals for a strengthened Economic and Monetary Union. Second, no member state was isolated. It was feared that this might happen, given the particularly strong views of some partners, but a spirit of aiming for consensus prevailed.

Third, the gaps between member states' positions have narrowed somewhat. We do not have agreement, but we have the possibility of agreement in sight.

President Van Rompuy must now continue his work on the MFF. He will consult further with member states with a view to identifying where agreement can be found and will return to the European Council early next year. In the meantime, I will keep in contact with my colleagues, including President Van Rompuy, and Irish officials will do likewise. The failure to reach agreement last week will of course have implications for our Presidency of the Council of the European Union, which will begin on 1 January, just a little over four weeks away. President Van Rompuy will play the lead role in taking the negotiations forward. The mandate to do so is his. It is the responsibility of the President of the Council to call the Council together when he is of the opinion that there is an opportunity to get agreement on a conclusion to the matter. He faces significant challenges in this, such as the overall amount, the relative amounts for cohesion and agriculture, and the allocations for infrastructure, research and SMEs. He must also find agreement on the contentious issues of the funding of the budget, the sources of revenue the EU should have and the kinds of rebate that are made available to member states in particular circumstances. I am confident he will succeed and I have said to him that Ireland in its upcoming Presidency will support and assist him in any way he wishes. We are at his disposal in this work.

Once agreement is achieved by the Council, it will be necessary to secure the consent of the European Parliament for the new framework. This will be an important challenge for our Presidency. This is the first framework negotiated since the Lisbon treaty entered into force and the Parliament's consent is required for the framework to be adopted. This should not be forgotten. There can be no MFF without the Parliament, a point of which I remind European Council colleagues when we sit down to negotiate a deal. That point was also made strongly by President Schulz when he addressed the Dáil.

Once agreement is achieved in the Council, working with the Parliament will be a key task for our Presidency. We will also have specific responsibility for advancing almost 70 pieces of legislation that will underpin the MFF. These cannot be finalised until the MFF as a whole is agreed, since the amount of funding and many of the conditions and elements for this legislation will only be set in the final MFF agreement. We will therefore work with President Van Rompuy to help to secure the earliest possible agreement so that we can make the kind of progress we have envisaged for the six months of our Presidency. At the end of the day, any agreement on the MFF must be one that reflects the current economic realities, provides the means to invest in growth and jobs and can be perceived by the electorates of Europe to be fair. It must also be one reached by consensus.

As a Union, we face a challenging global environment. The Union makes our position in the world stronger and we are at our most effective when we act together. If that spirit guides us in the negotiations ahead, I remain confident that agreement will be achieved. It will not be a deal in which any one partner, including Ireland, gets everything it wants. It will be a compromise, but it will be a deal that enables the Union to set its course for the next seven years.

While the firm focus of last week's meeting of EU leaders was on the MFF - the reason the meeting was called - Heads of State and Government also addressed briefly one other piece of business, namely, the filling of the vacancy on the executive board of the European Central Bank, which has been outstanding since the beginning of June. In line with the procedure set down in the EU treaties, the European Council appointed Mr. Yves Mersch of Luxembourg to the executive board of the ECB as and from 15 December 2012. I supported and warmly welcome this decision to appoint a person of recognised standing and professional experience, these being the requirements for this position as set out clearly in the treaties. This decision was made following a recommendation by the Council as well as opinions provided by the ECB's governing council and the European Parliament, which in the latter case provided a negative opinion on the grounds of lack of gender balance. I regret that the decision last week of the 17 euro area member states was not unanimous in appointing Mr. Mersch. One euro area member state opposed the appointment, but not on the basis of gender balance nor out of concern that the candidate did not meet the requirements for the job. I wish Mr. Mersch well in his important work as a member of the ECB's executive board.

I wish to assure the House that in our Presidency of the Council of the European Union from January next - and indeed in advance - we will continue to work with President Van Rompuy and with our partners to ensure that the Union provides itself with the kind of multi-year budget which will facilitate our collective endeavours at EU level. It is strongly in the interests of Ireland - as a member state and in our Presidency - and of the entire European Union that we reach agreement on a new MFF as early in the new year as possible. I will of course keep the House fully informed on developments in this area.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The member states of the European Union are going through a deep economic crisis. Unemployment is at historic and rising levels. States must pay excessive amounts to fund public debt and are cutting essential services. Growth projections for the years ahead continue to be reduced. The foundations of the common currency shared by most states are under threat. These are the uncontested facts that formed the background to this summit. Yet the leaders of Europe managed to meet for two days without discussing even a single measure that might help address any of the problems facing the Union today. Their failure to agree on a multi-annual budget was not a surprise or a major issue in itself. What is a further blow to confidence in the Union and its leaders is the lack of either ambition or urgency. The only item actually agreed at the summit showed an elite club mentality in the dismissal of a rarely used prerogative by the European Parliament.

With regard to Ireland’s immediate needs, there have been significant developments in the Government’s position. With regard to the budget, the strategy has been to follow France and little more. However, there have been major developments with regard to the financing of bank-related debt, which were not addressed directly by the Taoiseach.

The summit was called specifically for the purpose of agreeing the next EU budget. The decision to separate it from a regular summit meeting was in order to concentrate everyone’s attention and maximise the chances of success. In terms of its specific objectives, the summit was clearly a failure. Difficult budget negotiations are as old as the Union itself. There is no major problem with rolling over one year’s budget while a final agreement is being sought. What is a major problem is that the likely shape of the final agreement will undermine the ability of the Union to address the urgent economic crisis.

It is now clear that the final budget will involve a real reduction in EU spending. What is also clear is that the arguments are now mainly focused on which programmes can be cut in order to finance urgently required supports in areas such as innovation. This represents bad news for anyone who believes the EU can play a constructive role in helping Europe to return to growth and job creation. First, a budget of roughly 1% of the total national income of the member states is far too small to be able to make any serious contribution to renewed growth. One of the most important lessons of the crisis is that we cannot have a genuine economic union if transfers within the union are capped at a very low level. The contract to which members signed up stated that there would be support to aid development in return for unrestricted competition. For many of Europe’s regions feeling the impact of this recession through ever-rising unemployment, this contract is being broken.

Second, the pressures on the Common Agricultural Policy continue unchecked and threaten what is by far the most successful common policy. President Hollande has been forceful in demanding that the CAP budget not be reduced in order to fund other programmes. Hopefully, he will be successful for the most part. What is of much greater concern is the idea that funding might be restructured in such a way as to give undue priority to larger producers. This would be a betrayal of the spirit of the CAP and would directly undermine rural communities.

The Taoiseach has said on a number of occasions that he is emphasising the agrifood sector as a potential engine of growth and rising competitiveness for the Union. He is right in this regard. Ireland has a strong record of being innovative in the sector. The former Minister for Agriculture, Fisheries and Food, Deputy Smith, prepared Harvest 2020, which is still the blueprint for growth through innovation in the agrifood sector. To be fair, the Minister, Deputy Coveney, has acknowledged the vision and strength of this programme and the role of Deputy Smith in preparing it. Research and innovation programmes in the Department of Jobs, Enterprise and Innovation have been running successfully for a decade. However, I was surprised to hear the partisan, petty and blatantly untrue comment that was made by the Minister, Deputy Bruton recently. I refer to his claim that the State has done nothing to develop the research capacity of our world-competitive food companies.

The Taoiseach is wrong to place an emphasis on CAP having a concentration of support in the hands of larger producers. That should not be done at the expense of the wider agenda of increasing the quality and innovation of the sector. The support of rural communities and the environment are the soul of CAP. Ireland must do nothing to damage this. Under no circumstances should we support or implement a revised programme which is weighted against smaller producers. The Taoiseach has said on a number of occasions that the support of growth and employment is a major objective for the budget. However, this is not reflected in the likely budget. No net stimulus effect is possible if we reduce the budget in real terms while doing nothing to increase significantly support for job creation or the wider productive capacity of the Union. It would be a lot better for everyone if the empty claims about a budget for growth and jobs were put aside. I advise the Taoiseach to watch the rhetoric because it means nothing. It is beyond me that anyone can suggest that a budget which will be reduced significantly in real terms will be a budget for jobs and growth.

The fact that Ireland's role in these negotiations has been reduced to cheerleading for President Hollande is a direct reflection of the decision of the Taoiseach to opt out of all of the multilateral and bilateral budget initiatives which have gone on this year. I have referred to this previously. The Taoiseach is one of just three heads of state or government not to have joined one of these initiatives. The reason for this remains unclear. Now that the importance of the rotating Presidency has been significantly downgraded at the level of leaders, the burden of finding an agreement falls primarily to President Van Rompuy. Britain has a chance to parade its anti-Brussels rhetoric. Other countries should be satisfied that a symbolic cut in activity has been achieved. An agreement is likely to be reached by the meeting of the Council next spring, at the latest. Given that leaders have displayed an unerring ability to turn a problem into a crisis in the last few years, however, it is clear that nothing can be taken for granted.

The only formal decision taken at the summit involved the completion of the appointment of the President of the Central Bank of Luxembourg to the executive board of the ECB. This retrograde step reflects the arrogance of a group that is unwilling to accept legitimate opposition. While it is clear that Mr. Mersch is qualified to serve on the ECB's executive board, nothing unique in his qualifications required that he be pushed forward in the face of the opposition of the European Parliament, which has exercised considerable restraint over the years in using its powers to object to appointments to various institutions and has performed its role in a responsible and professional manner. It is not good enough that there has never been a woman on the most important body within the European Central Bank. It is a disgrace that there will be no woman on the executive board for at least another three years.

The appointment of the new Governor of the Bank of England has shown that a large number of highly qualified people can fill these roles. The candidates for such positions are not limited to a handful of people at senior levels in a few countries. It is a concern that Mr. Mersch appears to have been promoted as someone who would advocate a conservative approach to the ECB's role to counterbalance Mario Draghi's innovative approach. The membership of the ECB's executive board is unbalanced in nearly every key area. It does not have the range of members, in terms of gender, nationality, outlook and experience, to allow it properly to run the monetary policy of a union as diverse as the eurozone. It is clear that the failure of Ireland and of the Taoiseach to stand with the European Parliament on this issue was wrong. The President of the European Parliament was here not so long ago. The Taoiseach should have gone with the European Parliament on that. The process of inside deals must end. Ireland should join countries like Spain and Portugal that have said they will not agree to any more ECB appointments being made in this way.

Given that so much time was available for this summit, including the possibility of working into Saturday, it is surprising that the breakdown happened so quickly and that the leaders ran home as quickly as possible. It is inexplicable that this extra time was not used to attempt to unblock other vital negotiations. The negotiations on the banking union, which was agreed in general principle in June, remain blocked on fundamental issues. The deadline of having the legislation and the framework ready for implementation by January will be missed. The Taoiseach confirmed yesterday that it has not been replaced with a new target. It is an extraordinary development in light of the hype surrounding the June and October summits. For months I have been unsuccessfully trying to get the Taoiseach to outline Ireland’s position in relation to the banking union. During his filibuster of his own Question Time yesterday, the Taoiseach finally gave some detail. Given that there was no opportunity to follow up on those points and there is no coverage of what he said in today's media, it is worth going over his comments again.

The Taoiseach said that Ireland believes in a banking union which covers all European banks in a single system. This is perfectly reasonable and reflects all independent advice. He went on to confirm that Ireland is arguing against any proposals which might require a change in the Union's treaties during the lifetime of this Dáil. This is an extraordinary position. If there is one thing everyone knows by now, it is that the eurozone sovereign debt crisis has largely been caused by countries putting politics ahead of implementing the right policies. At every stage of the euro’s life, especially in the last three years, there has been a desperate attempt to do as little as possible rather than doing whatever is needed. That is why confidence has been undermined. The Taoiseach said yesterday that treaty changes should not even be considered until the term of the next European Parliament begins in two years' time.

Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I never said that.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Taoiseach said it is a matter for the next Parliament.

Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I said we will deal with the matter. The Deputy is being very selective.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Given how deeply important a functioning and effective banking union is for Ireland, this position is indefensible. The same approach led to Ireland making no positive contribution to negotiating the fiscal treaty. In fact, the Government pushed for it to be watered down in a desperate attempt to avoid a referendum. The people have shown they will support any proposal which can be shown to make a serious contribution to rebuilding economic confidence in Europe. In light of the failings of our banking system and our regulatory procedures, any treaty changes that build a strong banking union are likely to earn the people's support.

A significant development in what the Taoiseach has to say about our bank-related debt was buried in his reply to the 55 questions he took together yesterday. His failure to do detailed work in advance of June’s deal has meant there is no agreement between states on what it means. More seriously, the Taoiseach has never said exactly what we are looking for. Every other country that is receiving or seeking EU support has set out its objectives very specifically. Greece has been working to achieve changed terms which would help it to achieve its debt-to-GDP target of almost 120%. Spain is seeking between €50 billion and €60 billion in direct recapitalisation for its banks, with the risk being shared through the ESM. In contrast, Ireland's objective has been set out in as vague a way as possible. We are looking to reduce the burden of bank-related debt to help with debt sustainability. What is the Government’s definition of what is sustainable? What terms are required to deliver this? There appears to be terror in some Government circles that answering these basic questions might undermine their ability to claim victory no matter what emerges, which is what is most important to them.

Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We are trying to clean up the mess caused by the Deputy's party.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Taoiseach has started to move away from the strongest argument for why Ireland’s case is unique. Yesterday, he returned to his partisan argument of saying all debt was incurred solely because of the decisions of the last Government. He has forgotten his words of last month when he said "Ireland was the first and only country which had a European position imposed upon it in the sense that there wasn't the opportunity, if the Government so wished, to do it their way by burning bondholders". This is Ireland’s strongest case and the Taoiseach should stop undermining it.

It appears that the sale of the State share in AIB and Bank or Ireland to the ESM, which the Taoiseach and the Minister, Deputy Noonan, spoke about in June, is no longer being sought. No explanation of this change has come forward. I would appreciate if it could be confirmed.

Yesterday, the Taoiseach also said for the first time that Ireland wants to replace an overdraft with a long-term, low-interest mortgage. This marks a further major reduction in Ireland’s negotiating position. It appears the Government is no longer seeking to have the ECB extend the terms of the promissory notes but intends converting them into standard sovereign debt to be financed by the ESM.

Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy might tell us how he would restructure them.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

This would be a major defeat for Ireland and would in no way constitute a recognition of our unique case.

Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

He should tell us how he would restructure them.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is not the terms of the debt that are unfair; it is the fact that we had to incur all of it in the first place. As the Taoiseach admitted in Paris, a significant write-down of debt to bondholders would have occurred had it not been for the intervention of the ECB and others. Financing this debt in a slightly different way does not make it any fairer. If the Minister, Deputy Noonan, sneaks into the House next March to again proclaim victory on the promissory notes because he has converted them to standard sovereign debt, people will be ready for him. It will be seen for what it is - a failure to obtain recognition of the unique unfairness of the debt Ireland is being asked to carry.

As I have said before and as I will keep saying, no matter how often the Taoiseach deliberately misquotes me, if the ECB wants to ease the burden of this debt, it is technically easy for it to do so. It can agree a change to the length and terms of the promissory notes. I never said the negotiations would be easy but I find it incredible that the Government appears to have already given up on the core principle four months before the negotiations are due to conclude.

Enda Kenny (Mayo, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The cheapest bailout in history. That is what Fianna Fáil said.

Seán Crowe (Dublin South West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Yesterday, at the third time of asking, eurozone finance Ministers and the IMF reached an agreement to reduce Greek debt. They agreed a number of significant changes to the Greek bailout programme, extending the maturities for up to 15 years, reducing interest rates on loans from member states and adding an interest holiday of ten years on loans from the EFSF. While this may provide some short comfort for the Greek Government, it will not make its debt sustainable. That can only happen when the European Union agrees to write down a significant portion of the loans to Greece.

I watched a TG4 programme on debt in Africa last night. This is similar to the situation in which rich countries announced they would cut the debt of starving people in Africa and other parts of the world. Of course, if the debt is unsustainable and beyond the ability of countries to pay, then reductions, however good or well-meaning - even if they are just to make the creditor countries look good - do not have a huge impact on the debtor countries. The Greek situation is similar to this. While the reduction is helpful in the short term, it does not really resolve the problem.

Yesterday's deal once again highlighted the weakness of this Government's strategy in reducing Irish banking debt. While the Greek Government was able to secure an extension of maturities and better interest rates on its debt, the Irish Government appears unable to agree a common position with the EU to deal with our banking debt. The big question being asked in many Irish households is when the Government will stand up for struggling Irish people - people who see their children leaving and who are losing their livelihoods while their personal debts are mounting and their quality of life is being filleted. Most people are talking about this issue and they want the Government to adopt a more aggressive, fighting approach for a better deal on our unsustainable debt. I presume the Taoiseach hears the same in his constituency and when he travels around the country.

A deal that involves only reductions in interest rates and modest extensions of maturities, similar to that given to Greece, will not significantly reduce the burden of banking debt currently on the shoulders of Irish taxpayers. Only a write-down on the capital portion of the debt will achieve this outcome. The Taoiseach came back to the Dáil in June talking about his achievements, which he told us would lead to a deal on bank debt by October. October has come and gone and we seem as far away as ever from a deal on Ireland's legacy bank debt. While the Greek Government made some, if limited, progress at the European Council meeting, the ongoing failure of our Government to make any comparable progress speaks volumes.

The Taoiseach told us he did not raise the issue of bank debt during his recent meeting with Chancellor Angela Merkel on 1 November. I believe that was a mistake, as do many others. Ireland's debt-to-GDP ratio is due to peak at over 120% of GDP in 2013. By that stage, €1 in every €5 raised in tax will be going to pay off interest on the national debt. Approximately 40% of this debt is bad banking debt which the Government, and Fianna Fáil before it, inexplicably placed on the shoulders of Irish citizens. This banking debt is unsustainable and it needs to be removed from the shoulders of Irish citizens. However, this will only be achieved if the Taoiseach changes tack and stops dodging the problem and kicking it down the road. People talk in terms of waiting for a good time to move but the worry is that the longer we wait, the harder it will be to deliver a deal.

While there are many differences between the Greek and Irish situations, the common thread is that our respective debts will become sustainable only when the EU agrees to a debt write-down. In Ireland's case that could take the form of a write-down on the promissory note, while in Greece it would be a write-down on the EU loans. Will the Taoiseach give an update on the progress of discussions on the promissory note? Does the Government expect movement on this issue before the budget? Many people are asking these questions.

The EU summit at the weekend failed to agree a deal on the budget for the next seven years. While the Taoiseach said he is confident a deal can be done, this delay means any deal is likely to be hammered out under the Irish Presidency, on the Taoiseach's watch. The Taoiseach said there were a number of critical issues for Ireland in the budget, including the CAP allocation and Structural and Cohesion Funds, as well as funding for growth-enhancing measures such as research, education, European connectivity and support for the SME sector. I understand that net contributor countries such as Britain, Sweden and the Netherlands have argued for cuts in the budget. Like others, Sinn Féin favours a budget that is fit for purpose and responds to the needs of the Union, particularly those people who are bearing the brunt of austerity and its fallout throughout Europe.

A growing number of people believe that areas of waste in the EU budget need to be tackled and eradicated. People are looking at the bureaucracy of the institution. One issue that is repeatedly raised is the European Parliament's move from Brussels to Strasbourg every month and another is spending on militarisation. We know approximately €180 million is spent on the monthly move to Strasbourg and the spending on militarisation is growing.

There has been much talk from the Taoiseach and at EU level about stimulus and a renewed focus on job creation and growth.

However, the MFF looks set to be slashed by as much as €50 billion. Is there not a contradiction in what is happening? I accept pressure is coming from certain countries to cut the budget - that is understandable - but how can the MFF be used to promote growth when it itself looks likely to be cut? Does the Taoiseach agree that a decision to cut the budget for jobs and growth at this time does not make any sense? Did he raise the need to direct funds into infrastructural and job creation programmes at the summit?

The priorities for this country are the CAP - maintaining the budget for direct payments and Structural Funds including a new PEACE IV programme. What position did the Taoiseach take on those issues at the summit? A cross-party group of members from the Joint Committee on the Implementation of the Good Friday Agreement went to Belfast last weekend. We went to a number of interface areas where we could see the positive work that is being carried out, much of it funded by PEACE III money. Some of the groups said they had not being paid for months. It is important that funding is continued. I would like to hear about any discussions that might have taken place on the matter.

The specific issue of youth unemployment has been identified by European Parliament President, Martin Schulz, as Europe’s biggest problem. The President, Michael D. Higgins, has made similar remarks. In September 2012, a total of 5,520 million young people under the age of 25 were unemployed in the European Union. The rate of youth unemployment is 52% in Spain and 54% in Greece. I mentioned at the meeting of the Joint Committee on European Affairs the fact that youth unemployment is 8% in Germany. It is 30% in this county. At present there is no specific funding stream to deal with the issue. If the budget does not grow then are we to take it that funds for youth unemployment will have to come from somewhere else in the budget? People are looking for answers. They want to know if there will be a stimulus package for youth unemployment. I am aware that the Commission will publish its report on the issue in December. Youth unemployment is a key issue that is affecting people across Europe and we must come up with solutions to combat it.

Farming and the agrifood sector are of vital importance for the Irish economy. These sectors must be protected and developed. They are the life blood of rural Ireland. The Government must get the best CAP deal possible. A prosperous agrifood sector can play a significant part in economic recovery across the island. However, if the sector is forced to sell produce below the cost of production it will only drive more people from the land with a seriously detrimental effect on the general economy. We must get serious about protecting our agrifood sector. A healthy CAP is the way to go about that. Could the Taoiseach outline what approach the Government will take on the negotiations? Does he agree that moving towards a more equitable system of farm payments would help to keep currently struggling farm families on the land?

Before the European Council meeting we raised the issue of Gaza with the Taoiseach. I understand that last weekend’s summit was to focus on the seven-year EU budget from 2014. The EU has a vital role to play in dealing with the Middle East. The Gaza situation should not have been far from any EU leader’s mind. I welcome the recent ceasefire that has been announced, and I commend the substantial role the Egyptian Government played in the process. Despite the fact that Israel broke the ceasefire on Friday, 23 November when its soldiers killed an unarmed 20-year old Palestinian farmer, the ceasefire is holding, but we do not know for how long. On Sunday, the Israeli Prime Minister, Benjamin Netanyahu, indicated the low confidence he has in the durability of the ceasefire with Hamas. He publically told pilots who took part in Operation Pillar of Defence that they could now prepare for the next campaign, and he said that it is likely that reservists would be called up again. A fully inclusive talks process is required. The illegal blockade of Gaza by Israel is causing significant socioeconomic problems within Gaza and the civilian population is facing major hardship. Pressure must be placed on Israel to lift the illegal blockade and to stop building settlements in order for inclusive and productive talks to take place. The EU is a position to place pressure on Israel and to push for talks. Nobody else is exerting pressure. There is a responsibility on those of us who want to see a settlement and an end to the conflict in the region.

Could the Taoiseach indicate whether the issue was raised at the summit, and if he expects it to be raised at future summits? Does he agree that the EU has a vital role to play in this regard? If the EU is serious about creating a durable peace deal for the region it must place significant pressure on Israel to enter into negotiations with the aim of establishing a two-state solution to end the conflict for good. The current actions of the EU not only allow Israel to continue its human rights abuses but, increasingly, they reduce the prospects that a two-state solution to the conflict will ever be achieved.

Joe Higgins (Dublin West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

I wish to share time with Deputies Catherine Murphy and Seamus Healy.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
Link to this: Individually | In context | Oireachtas source

Is that agreed? Agreed.

Joe Higgins (Dublin West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

Any analysis of the most recent EU leaders' summit must be done against the background of yesterday's OECD report on the world economy which showed the eurozone plunging into recession. It indicated that the eurozone economy will contract by 0.4% in 2012 and another 0.1% in 2013. Furthermore, the OECD commented that diverging financial conditions and the debt crisis threatens to pull the eurozone apart. The threat is in no way lessened by the arrangement arrived at by the Eurogroup of Ministers on the Greek economic crisis and Greek debt. The alleged easing of debt pressure on Greece in fact makes a mockery of the Greek people - crucified by vicious austerity to satisfy international bondholders, their society has been pressed to the very limits of endurance. Now we have a proposal that merely recognises the impossibility of Greece ever paying its unsustainable debt but maintaining most of that debt burden and the crushing austerity on the shoulders of the Greek people that goes with it. The fate of Greece is like a man plunged into a lake with a millstone tied around his neck and concrete blocks to his ankles. As he sinks inexorably to the bottom the eurozone Ministers jump in and cut the concrete weights and tell him to swim with the millstone still in place.

The EU summit has not even recognised the depth of the crisis in the eurozone. The President of the EU Council, Herman Van Rompuy, outlined in a post-summit statement: "Everybody also agrees on another point: This must be a budget for growth. A budget that focuses on jobs, on innovation, on research." That is insulting lip service to the tens of millions of European citizens suffering the dreadful consequences of the disastrous austerity agenda driven by Mr. Van Rompuy and the EU establishment. It is a mockery of the 25 million people suffering unemployment in the European Union, including millions of young people. It is a continuation of the smothering economic policy of austerity.

European capitalism is a sick and dysfunctional system. European big business currently sits on €3 trillion of accumulated profits which it refuses to invest in creating new production and jobs because it is not confident of getting sufficient further profit in return.

Investment is the motor force of capitalist development. This strike of capital dooms that system to ever-deepening crisis, shows no way out of the economic depths and condemns the working people and the poor of Europe to further unemployment and poverty. As evidenced by the recent summit, the EU political establishment is a mere onlooker as this process takes place, a mere creature of European big business and the financial markets. It is and will be helpless as the crisis develops, because this system inevitably will force Greece out of the eurozone. With its unsustainable debt, Ireland will most likely follow in the future.

On 14 November tens of millions of workers in Greece, Spain and Portugal went on strike against austerity, demanding strategies of investment and jobs. European workers are realising they can rely only on their own power to force change in policy. A socialist approach would be that the financial markets, rather than being dictatorships over our economy and our people, should be taken into public ownership and democratic control, offering investment based on the needs of society. It is the same with the massive resources on which big business is sitting at the present time. On this basis, a democratic plan for investment in production would create the tens of millions of jobs that are needed, boost the public services, create a future for youth and a decent future and security for the peoples of Europe. That is the way we must go, not relying on the EU elites as they sit in Brussels at their very frequent summits.

Catherine Murphy (Kildare North, Independent)
Link to this: Individually | In context | Oireachtas source

I reiterate how disappointing it is that the Taoiseach did not see fit to stay to listen to one third of the Opposition, which the Technical Group comprises.

In my view this round of budget negotiations cannot be separated from the economic crash although that is the context in which the talks are taking place. Looking back over recent years, there is no doubt that the entire economic crisis has been hugely mismanaged by the same people who will provide the leadership for the next seven years of budget negotiations. One question we must ask is what are the guiding principles driving this set of negotiations. We cannot separate the two. The guiding principles of the European Union include sustainable development based on balanced economic growth and price stability, a highly competitive social market economy that aims for full employment and social progress, and a high level of protection and improvement of the quality of the environment.

I refer to the promotion of economic, social and territorial cohesion and solidarity among member states. We cannot say we saw much solidarity. It is important to ask what is guiding these talks because there are two distinct and evident blocs, one a liberal market bloc, the other a social market bloc. I do not know to which one we have aligned ourselves but it is a case of choosing either-or. We either want to have a European Union that works in the interest of the peoples of Europe or a bloc that seeks a more limited approach, such as the example articulated by the Conservative Party in the UK, which sees the EU as merely a mechanism for engaging with a very large market, not about how that market functions for the people of Europe. It is important that we ask about the context in which these negotiations are taking place.

For example, are we prepared to jettison the solidarity we have an expectation and a right to have, given the founding principles of the European Union? Are we prepared to do that because at this point, given the economic crisis, we see it as a luxury ? Our vision should be to have a better Europe in seven years’ time rather than merely to consider the present situation. A vision cannot be delivered upon without an understanding of the context of budget negotiations over the coming seven years.

There is a key issue that needs to be negotiated from front to centre, namely, employment. Unless there is a serious initiative and a central employment theme to the budget negotiations, not only will we continue to leave people living in poverty and have inadequate budgets to run social services, we will risk returning to a point where, on the 100th anniversary of the commencement of the First World War, we revisit the problems that gave us not only one but two world wars. The reason the EU was founded was to address that situation in order that people could work in solidarity. That must be the central theme of these negotiations; it is about uniting the peoples of Europe.

This is not about the detail, but about the core. I did not hear that from the Taoiseach, although I heard the detail. I would welcome a response from the Minister of State, Deputy Creighton, on the context of these negotiations.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
Link to this: Individually | In context | Oireachtas source

Write-off of debt is a major issue for the people of Europe. It is a life and death issue for Ireland and our people, particularly middle and lower-income families who have been absolutely savaged by cutbacks and increases in taxation and are promised more of the same in a week’s time. The matter of debt should be raised at every opportunity. It is wrong, and a significant failure of this Government, that a summit should go ahead without this matter being raised.

This week saw the Greek deal but it is one that will not solve the Greek crisis. At best it will keep the Greek Government and people on a life support machine. However, it is better by a long shot than what we got. Up to now, the Greeks had a deal of €100 billion write-off of debt. This week’s deal continues that process. Some of the details of the deal include the write-off of some Greek debt for the years 2016 to 2020, the reduction in interest rate on some of its loans to 0.5%, or virtually nothing, the scaling back of interest rate on loans and a ten-year deferral of interest payments which will save approximately €44 billion for Greece. Greece will buy back its own debt from market investors at below-face value. Eurozone countries will also forego their profits on Greek bonds, held by national central banks. A doubling of Greek rescue loan maturities to 30 years will send the country on a path towards 2040.

The entire issue of write-off of debt is still there to be dealt with. To reiterate, the Greek deal is by a long shot much more than we received. Why did Ireland not achieve the equivalent of that deal? After all, the principles of debt write-down, reduction of interest rates, extension of loans and extending bond maturities have been accepted by the EU. The reason we have not got the same deal is that the big EU powers know they will not and cannot get their money back from Greece.

The debts of private banks here and the corresponding investments of European banks and finance houses should not be repaid by Ireland. Only when the EU powers know they cannot get their money back from Ireland will they consider applying the principles of the Greek deal to this country.

To paraphrase James Connolly, it is time we started the reconquest of Ireland for the Irish people. In order to do this, we must begin by stopping the repayment of the promissory notes. We should also stop other banks procuring or paying them at a cost to the State, which is what happened last March. If we did as I outline, it would concentrate the minds of those in authority in other European countries. We should also stop all repayments on the outstanding €36 billion in bonds held by Irish banks. This is not an extreme proposal. In fact, it was put forward by Deputy Peter Mathews of Fine Gael. In an interview with the Sunday Independentsome weeks ago he stated Ireland should stop trying to be the best boy in the class and called on his own leadership to play hard ball, including by refusing to pay the remaining €36 billion to bank bondholders. We should also freeze all payments to the ESM. If the latter can only be used to recapitalise banks which fail in the future, why should Ireland be paying it €1.2 billion? Some €254 million of this money is to be paid before the end of the month.

The measures to which I refer must be taken in order that we might stand up to the larger European powers and obtain a write-off of our debts. If we do not take action, the social and economic devastation being visited on the country - more of which is promised in next week's budget - will continue.

Robert Troy (Longford-Westmeath, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

There are 20 minutes available for the question and answer session. I ask Deputy Micheál Martin to pose his questions.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The EU budget was the centrepiece of the summit and the entire emphasis of the debate was on cutting it even further. Does the Minister of State agree that the existing budget which is 1% of the total national income of member states is particularly and uniquely inadequate in dealing with the worst existential crisis ever to hit the eurozone? Despite all references to a pan-European stimulus, etc., the discussions taking place between the leaders of EU member states are quite depressing because not even a gesture is being made towards resolving the crisis we are experiencing. I do not see how a reduction in the European Union's budget can lead to any stimulus for growth and job creation. Does the Minister of State accept my basic proposition that the trend of the negotiations is negative and taking us in the wrong direction in dealing with the crisis?

Will the Minister of State indicate that the Government is clear on the point that small farmers and rural communities must be protected in the context of the Common Agricultural Policy? Will she outline whether Ireland has built up alliances beyond France? It is clear that President Hollande is the key person in protecting and saving the Common Agricultural Policy. Why did the Taoiseach not participate in the multilateral and bilateral budget initiatives involving different countries which took place during the past 12 months?

In the context of the banking union, will the Minister of State indicate whether treaty change will be required? Should we not be preparing the public for the possibility of a further referendum being held in order to facilitate the establishment of a banking union? Will the Minister of State clarify the position on this matter?

On the nominee to the executive board of the European Central Bank, ECB, does the Minister of State agree that the Government got it wrong in supporting Mr. Mersch and should instead have agreed with the European Parliament in this matter? Does she agree that it is disgraceful that a woman has never served on the executive board of the ECB and that there will not be a woman on it for the next three years at least? Surely Ireland could have made a stand in this matter. Will the Minister of State indicate why it did not object to the nominee and support the European Parliament in the context of the gender issue relating to the executive board of the ECB?

Is the Minister of State in a position to confirm that a sale of equity or shares in AIB and Bank of Ireland to the ESM is no longer on the agenda?

Robert Troy (Longford-Westmeath, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I will take questions from two more Deputies before calling on the Minister of State to reply.

Seán Crowe (Dublin South West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Was any progress made and did discussions take place on the promissory notes? Deputy Micheál Martin referred to the CAP. I posed questions to the Taoiseach in that regard earlier. I accept that the summit focused on the MFF, but was the situation in Gaza the subject of discussion?

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

The entire strategy of the European Union, endorsed from what I can see by the Government, has been to recapitalise and repay banks, to make them more profitable, to focus on them all of the time and to pay for this by means of austerity, supposedly in the name of competitiveness and efficiency. Is there any recognition on the Government's part or that of European leaders that this is just not working? We are five years into this strategy and it is not working. As a result, the European Union is tipping further into recession. Does the Minister of State accept that all the hopes for significantly renewed growth, both in the economy and across Europe, are being dampened because the austerity strategy is not working? Is it not time that the Government raised its voice and, to paraphrase John F. Kennedy, asked not what the people can do for the banks but rather what the banks can do for the people? Is this not the time to begin to look at matters the other way round and prioritise jobs instead of protecting the banks?

Is it not amazing that after each summit the Taoiseach comes before the House and talks up the situation in Ireland, yet the projections for job creation for next year are flat? There will be no increase in employment next year. That is the issue which matters to people. All the growth forecasts are being downgraded and we are faced with an unsustainable level of debt. Is the lesson to be learned from what occurred in recent days that the European Union was forced to provide for a debt write-down for Greece because it had become apparent that the latter simply could not repay its debt and that its people could not take anymore? Is it not time that Ireland sent the same message to the European Union? Will the Government inform European Union leaders that the 1.8 million people who are living in poverty here cannot take anymore? Will it inform them that austerity is not working, that the people cannot take this pain and that we cannot afford to make €9.1 billion - or 20% of our overall expenditure - in debt interest repayments next year? Why not send that message, particularly as we have obtained diddly squat - well, words but nothing substantial - in respect of the issue of interest repayments?

My final point relates to the situation in Gaza. Do we not have a special responsibility to point to the appallingly cynical nature of the Israeli assault on Gaza which, for the fourth time in five years, has coincided with the holding of elections in Israel? Do we not have a responsibility to speak out about the fact that successive Israeli Governments think killing Palestinians is a way to attract votes? Should we not speak up loudly on the international stage about this matter? Should we ask Israel to stop behaving in this rogue fashion? As a former colony, Ireland has a responsibility to be much more blunt at European level in demanding an end to this type of cynical and murderous politics on the part of Israel.

Lucinda Creighton (Dublin South East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Deputies for their questions and comments. I will begin by referring to Deputy Martin's series of questions. Of course I do not agree with the emphasis placed on cutting the budget. This has been the clear position of the Irish Government from the outset of the MFF, multi-annual financial framework negotiations. Along with a number of other member states we argued strongly in favour of the original sum total in the Commission proposal. There is a significant downward pressure on the budget from the net contributors. This ties into the Deputy's question as to why we did not formally join the two key multilateral groups. The first group is the Friends of Cohesion group. Deputy Martin will be aware that Ireland receives negligible funding in the form of Cohesion Funds, relative to what we receive under heading two of the Common Agricultural Policy. It was not in our national interest to argue strongly for the advancement of cohesion ahead of CAP. We had to choose priorities and our priority lies with the CAP. The second multilateral group is the so-called Friends of Better Spending which incorporates the 1% group which wants to reduce the overall size of the budget. Clearly, Ireland was not willing to participate in that group because we do not support the overall objective which is to drive down the total size of the budget. However, we share some common goals with both groups. We agreed with the Friends of Cohesion who are broadly supportive of the overall size of the Commission proposal. We were happy to support the group and for it to support us in the various discussions at the General Affairs Council. We had common ground with Friends of the Presidency group. We also shared some common ground with the Friends of Better Spending group, although not with regard to the overall size of the budget. We shared common ground on competitiveness and ways in which the budget could be reformed and could be more growth-friendly. We were happy to support elements of that agenda. Ireland holds a very particular position. For example, we share common ground and have built strong alliances with countries such as France, Spain and Germany, on the issue of the Common Agricultural Policy. We have been able to find common positions and common ground with them on issues relating to the Common Agricultural Policy. However, it was not in Ireland's interest to align itself fully with either the Friends of Cohesion group or the so-called Friends of Better Spending group. Such alliances would have been contrary to our national interests.

On the question of whether Ireland supports the promotion of rural Ireland and the cause of small farmers, I say emphatically that Ireland does so. I agree with Deputy Martin that rural communities are the lifeblood of this country. Over the decades Ireland has used both Pillar 1 and Pillar 2 of the Common Agricultural Policy very successfully to support that policy and we will continue to do so. The Irish Presidency begins on 1 January 2013 and the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, will lead on the reform of the Common Agricultural Policy. He will work closely at Council level and with our colleagues in the European Parliament to ensure the interests of all farmers are protected. He will continue to promote high quality agrifood sector produce both in this country and across Europe.

The Taoiseach and I attended the summit meeting last Thursday. We had a very interesting conversation with the IFA delegation about the potential for future growth in the agrifood sector when we met them in Brussels last Thursday. The Government is committed to the promotion of this sector. Such growth will be promoted by means of new free trade negotiations and opportunities during our Presidency to advance a negotiating mandate on a free trade agreement with the United States. The agrifood sector offers significant potential for Irish farmers and for exports. The Common Agricultural Policy is the vital tool, along with the potential offered by access to emerging markets.

Deputy Martin asked a question about banking union. It is not clear that treaty change is required on banking union. Ireland supports banking union and it is a key priority for the Irish Presidency. The first step is to ensure a legal basis for the implementation of the single supervisory mechanism. The other proposals to be progressed during the Irish Presidency include an EU-wide bank deposit schemes and an EU-wide bank resolution scheme. We hope to have a clear mandate from the European Council meeting in December for these proposals. We will take the necessary steps to achieve banking union. I have no fear about taking whatever measures are necessary to bring that policy forward which is vital to the interests of Ireland, the eurozone and beyond.

On the question about nominations to the board of the European Central Bank, I agree with the Deputy that it is not acceptable that the ECB board has never had a female member. The European Commission is in the process of bringing forward proposals on gender balance on boards. We expect to bring forward those proposals forward during the Irish Presidency. Mr. Mersch was the only candidate proposed to the European Parliament. It is broadly agreed that he is eminently qualified for that position and Ireland was happy to support him on that basis. If a qualified woman candidate is proposed in the future then she should not be prevented or blocked from doing the job. I do not think Ireland should have taken up a position which would have isolated itself at the European Council by taking a lone path-----

Robert Troy (Longford-Westmeath, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I remind the Minister of State that time is short and other Members wish to ask questions.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I asked a question about the ESM.

Lucinda Creighton (Dublin South East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Nothing is ruled out with regard to the European Stability Mechanism. We are exploring all potential options. No path has been ruled out by the Government.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister for Finance has more or less ruled it out.

Lucinda Creighton (Dublin South East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Government has not ruled out any option. This is the case in so far as I am aware.

Deputies raised the issue of the situation in Gaza. The Foreign Affairs Council dealt with this issue last week. The Tánaiste and I attended the meeting. The conclusions of the Foreign Affairs Council have been adopted by the European Union every month for the past number of years. It is difficult to find a complete consensus on this matter. I do not subscribe to the view that this is a one-sided conflict. In my view it is a two-sided conflict. I do not agree with rockets going over the border to Israel nor do I agree with or condone the actions of the Israeli defence forces. Ireland has a very proud tradition as an honest broker in this area. We have attempted to bring our experience in building peace to bear on the situations in regions such as the Middle East. It would be very counter-productive for Ireland to ignore the wrong done by one side or the other. We have to be fair-----

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

It is hardly an even conflict.

Lucinda Creighton (Dublin South East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

-----in our defence of human rights and of innocent civilians. The European Union has the potential to take a lead on this issue. High Representative Catherine Ashton has adopted a leadership role, particularly during the recent US presidential elections when there was very little engagement by the United States in the situation in the Middle East. I was pleased to see the intervention of the US Secretary of State, Hillary Clinton. International intervention to influence both sides to lay down arms and to come to the negotiating table is in everyone's interests. As a representative of the Government I am happy to advocate that policy.

Joe Higgins (Dublin West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

Although the Minister of State is in Brussels during summits, does she actually attend the meetings of EU leaders?

Lucinda Creighton (Dublin South East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Of course not; I am not an EU leader.

Joe Higgins (Dublin West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

In that case, the Taoiseach should have remained to assist the Minister of State in replying to these questions which are on critical issues. In any case, I am sure the Minister of State is close to the thinking and discussions when she is in Brussels. Was there any recognition of the serious economic difficulty facing the eurozone, as referred to yesterday in the OECD report which indicates a contraction in the eurozone economy this year and next? What are the implications in dealing with the debt crisis?

Is there any recognition that the economic policy of austerity has been a massive failure? Apart from the lip-service paid by President Van Rompuy to focusing on investment and job creation, is there anything concrete that would give hope to the 25 million unemployed in the European Union?

While I acknowledge the summit concentrated on the budget of the European Union, was there any discussion of the debt strategy for Ireland, Greece and other countries? Has the Minister of State seen a report today by Mary Ellen Synon, a journalist in the Irish Daily Mail? She quotes from an article in a Portuguese language business newspaper, Jornal de Negócios, that states Mr. Jean-Claude Junker said in the depths of the night, following the Eurogroup Finance Ministers' meeting, that Portugal and Ireland would have similar arrangements put in place for their debt as agreed for Greece.

Catherine Murphy (Kildare North, Independent)
Link to this: Individually | In context | Oireachtas source

I want to focus again on job creation and employment. If the seven year budget for the European Union is to be successful, it should be measured by the number of countries that will be net contributors at the end of the process. This leads back to the issue of the eurozone and the financial position of Ireland and countries in similar circumstances. We need to obtain detail on how serious the focus was on job creation. We need to hear it was not an afterthought and know exactly what the Government is bringing to the table in this regard.

We can see the kind of behaviour that is rewarded regarding debt relief. The countries that have brought the European Union to the brink are those that have had a revolution.

With regard to Anglo Irish Bank, we have noted a gesture from the Taoiseach indicating that the re-engineering of the promissory note is being examined. This would be in contrast with the approach taken to Greece. What overall vision is driving this set of talks?

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I would have gone to the meetings of Friends of Cohesion for no reason other than to stay in touch and meet people.

Lucinda Creighton (Dublin South East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It happens all the time.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Cohesion Fund expenditure in another country can be of great benefit to Irish companies that supply services to many of the countries that require such funding in a single market. I do not like the fact that we seem to have been very isolated in the past 12 months in the budget negotiations.

The appointment of Mr. Mersch was organised by a cabal or elite group. Somebody must make a stand from time to time and I regret that the Government did not oppose the appointment. It is not a question of being isolated as we are entitled to take a stand on issues. One constantly hears the diplomatic statement, "We do not want to be isolated on anything." Every now and again, however, standing up for a principle earns one greater respect from colleagues and others around the table-----

Lucinda Creighton (Dublin South East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As we did on the CAP consistently.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

-----than one would otherwise earn if one had the mentality of going along with the herd.

The European Union has not been effective enough in dealing with the situation in Gaza. Transfers of funding from the Union to Gaza, through the United Nations, have been helpful, but there has been an extraordinary lack of investment in and engagement with Gaza regarding fundamental infrastructure. When I was Minister for Foreign Affairs three years ago, I was at meetings at which all sorts of promises were made on water treatment plants, the building of schools and education infrastructure. None of these has been honoured. In essence, the policy has undermined the voices of moderation and has been music to the ears of those with more fundamentalist opinions in Gaza. The European Union is culpable in that regard.

We on this side of the House also condemn the firing of rockets into Israel by Hamas. However, one cannot bomb Gaza without causing civilian deaths and casualties. It is just not possible to carpet-bomb Gaza without killing children and entire families. The death and destruction in Gaza in recent weeks were absolutely unacceptable, notwithstanding the threats to Israel's security. In the longer term the European Union needs to be far more effective in ensuring vital infrastructural work is done in Gaza.

Robert Troy (Longford-Westmeath, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister of State may reply to the questions briefly and then proceed to wrap up for five minutes.

Lucinda Creighton (Dublin South East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will not have time for my wrap-up at this stage. The Minister for Finance, Deputy Michael Noonan, is waiting.

I am not really sure what Deputy Joe Higgins's questions were. Clearly, we have a different outlook on the measures required to rebalance the public finances and get the Irish and European economies back on track. I am not sure we will be able to align our positions in any sense.

On the genuine question on concrete steps on job creation, there is considerable untapped potential in the European Union. The process of realising fully the potential of the Single Market is not nearly complete after 20 years. The Single Market has been very beneficial for the economy and Irish companies, particularly the SME sector. It has also been very important in attracting inward investment. There is potential to open up the Single Market for services. Ireland's economy is becoming increasingly oriented towards the exportation of services. This is vital to us.

The implementation of the overall digital agenda, as proposed by the European Union and agreed by all member states, and specifically the measures in respect of the digital single market comprise very concrete steps that will be taken forward by the Irish Presidency from 1 January. It is estimated that if the digital agenda, as outlined by the European Commission, is fully implemented by 2020 and backed by the member states and the European Parliament, it could contribute approximately 4% to the overall GDP of the Union, which is significant. While we may talk about stimulus programmes, the reality is that there are very few resources available for stimulus programmes across the European Union. What we can do is generate growth through competitiveness. Deputy Joe Higgins may not like competitiveness, but I happen to be a big believer in it. We can also generate growth by opening up markets and enabling entrepreneurs and innovators to find new market opportunities within the Union and through free trade agreements, FTAs. Ireland is talking about completing the FTA with Canada, moving forward with one with Japan and beginning the negotiations on one with the United States.

If the will exists at European level - I believe it does now more than ever before - we can contribute something to growth in the Union, which is the only sure way to ensure job creation.

Deputy Murphy asked a fair question about what is happening in the context of funding through the budget process investment in services and infrastructures that can assist growth and job creation. Even with the reduction proposed by the Council President under heading 1A, which specifically focuses on research, innovation, education and so on, it is still proposed to double almost the investment in research and development under the Horizon 2020 strategy and through education measures such as Erasmus, which is significant. We would all love if more resources were available and if there was not a drive from the net contributor countries to reduce the Union's budget but we are fighting to maintain this important heading, which accounts for approximately 10% of Irish net receipts from the Union through the multi-annual financial framework. It pales into insignificance compared to the CAP, which accounts for more than 85%, but it is still important and has huge potential for growth. This is not fixed expenditure allocated per member state and, therefore, every member state, company and academic institution can compete for funding under this heading. Ireland can do much better under the next multi-annual financial framework. We would all love if there was more potential but we can do a great deal with this budget.

Under the Irish Presidency, we are looking at moving forward with a proposal that will be published by the Commission next month, which is the youth transitions programme. This will incorporate the so-called youth guarantee, which the Minister for Social Protection will prioritise. That will present a framework to help us to target youth unemployment at a Europe wide level based on the Austrian model, which has been successful. It has great potential.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Austrian model replaced the Dutch model.

Lucinda Creighton (Dublin South East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

This will be an EU-wide model and I hope the Deputy's party will support it when it comes up because it is important.

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It means nothing.

Joe Higgins (Dublin West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

Has the Minister of State any comment on what Mr. Juncker said?