Dáil debates

Tuesday, 6 May 2014

7:05 pm

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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I am very pleased to address the House today at the start of Europe Week and the start of a significant few months for the European Union, its citizens and its institutions. By the end of this month, a new European Parliament will have been elected. Later this year, we will choose new presidents for the European Council and the European Commission, and a new College of Commissioners will be appointed.

This month ten years ago, under an Irish Presidency the European Union celebrated its biggest ever enlargement. Ten member states - Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia - joined on 1 May 2004. Bulgaria and Romania joined shortly afterwards. They have each contributed greatly to the Union since then, and we have been mutually enriched by their membership. More recently, we have welcomed Croatia to our European family. We in Ireland have had a particularly positive experience of strengthening our relations with the newer member states, including through the welcome presence here of many of their nationals. Over the past ten years, the number of EU member states has almost doubled, from 15 to 28, and this is a testament to the enduring attraction of EU membership and our shared commitment to working together for the mutual benefit of our citizens and nations.

In the past few years, the Union has faced what is perhaps the most serious economic crisis since its foundation. Together and individually, the Union and its member states have acted to confront this challenge; we have taken significant and, at times, painful measures but we have made progress. While there is still a way to travel, the Union and its member states are beginning to emerge stronger, more resilient and more confident.

The Union today faces another great challenge, albeit of a very different type. Events in Ukraine represent a serious threat to the hard-won security and stability of Europe, and to the still-fragile economic recovery. EU leaders continue to work together to support the Ukrainian Government and people, to act against those responsible and to bring about an early and a peaceful resolution. This Government remains deeply concerned about the ongoing crisis in Ukraine and has emphasised the importance of seeking a negotiated political settlement. However, we are also ready to take decisive action, if required. The European Council has addressed this issue twice in the past two months, and it remains at the very top of the agenda.

The challenge the situation in Ukraine presents is not just to our interests, but, more fundamentally, to our common EU values. Our Union is founded on respect for the rule of law, in international relations as well as in our internal affairs. We cannot celebrate Europe Day and all that Europe stands for while at the same time simply acquiescing in the illegal annexation of the territory of a European country. Our European values - democracy, respect for fundamental rights and the rule of law - demand more from us than that. We must not forget why we came together as a union and what we stand for. The Union touches the daily lives of most EU citizens, including the Irish, most closely in the manner it effects their economic and social well-being. I refer to the familiar trio of jobs, growth and stability.

Recently, both the domestic and EU economy showed signs that recovery is beginning to take hold. Significant challenges remain, however. Supporting recovery remains a key policy focus for both Ireland and the Union. In particular, we must ensure recovery brings jobs, and therefore that employment remains one of the key priorities of the European semester process.

The European Council will complete next month the 2014 European semester process when it signs off on the country-specific recommendations for each member state, including Ireland, this year. We can expect employment to be front and centre here.

At the end of last year, the Government published its medium-term economic strategy to 2020, which complements efforts at European level such as the guidance given by the March European Council as part of the semester process.

The indicators for Irish GDP growth, Irish public finances and Irish employment growth are all moving in the right direction. The unemployment rate, for example, is projected to average 11.5 % this year. Of course, this is still far too high, and we will continue to spare no effort to redress that situation.

As the House knows well, last December Ireland exited its EU-IMF programme and did so without the assistance of a precautionary credit facility. It was able to exit without a credit facility thanks in the main to our steadfast programme implementation, the continuing support of our EU partners and the acceptance of the challenge by our people.

Modest, but still important, growth is forecast for the EU and eurozone in 2014, and this is expected to strengthen further in 2015.

A slight rise in employment is forecast from this year onwards, with unemployment falling to 10.4% in the European Union and 11.7% in the euro area by 2015. In 2014 deficits are set to fall to 2.7% of GDP in the European Union and 2.6% in the euro area.

Developments in Portugal and Greece provide further encouraging evidence of recovery. Later this month Portugal will exit its EU-IMF programme and indications are that, like Ireland, it will do so without a precautionary credit facility. Last month Greece returned to the markets for the first time in four years, raising €3 billion on foot of bids exceeding €20 billion. The reductions in bond yields for countries such as Ireland, Portugal, Greece, Italy and Spain in recent months confirm that our economies are on the right track.

Real progress has been made in completing banking union, the key to ensuring there will be no repeat of the economic and financial crisis. From November the Single Supervisory Mechanism will assume responsibility for the 120 most significant institutions and the Single Resolution Mechanism will enter into force from 1 January 2015. The effect of these will be that shareholders and creditors should bear the costs of resolution before any external funding is granted and private sector solutions should be found instead of using taxpayers' money. Progress has also been made since last year on direct bank recapitalisation and I remain confident that the commitment made by the euro area Heads of State and Government in June 2012 to break the vicious circle between banks and sovereigns will be respected.

My colleagues and I on the European Council are adamant that sustaining the economic recovery remains the key priority. The conclusions of the March European Council focused on the economy and I expect those of the June Council to maintain this focus. However, we also addressed other vitally important issues. A secure, sustainable and affordable energy supply is an essential requirement for citizens and businesses. The March European Council called for urgent work on fair effort sharing, modernising the energy sector, prevention of carbon leakage and an energy efficiency framework. We also agreed to accelerate efforts to complete the internal energy market this year, including through increased electricity interconnections, and launched a process to reach agreement on the 2030 climate change and energy framework by October. Energy security has become more urgent given developments in Ukraine. My colleagues and I on the European Council will be tackling this issue and the difficult decisions that come with it in the months ahead.

Ireland and the European Union have travelled far since the Dáil marked Europe Week this time last year. Since last May, we completed our successful and well received Presidency. We successfully completed and exited our EU-IMF programme. We re-established our standing and influence in Europe. We worked hard and long with our partners in Europe to meet the challenges facing citizens. While we have achieved much together in the last 12 months, we recognise the scale and seriousness of the challenges still facing us. Some of these challenges, like the crisis in Ukraine, would not have been foreseen this time last year. Others, like climate change and energy, are growing in priority and urgency. Still others such as fighting unemployment and strengthening Economic and Monetary Union have been and continue to be the focus of determined efforts on all our parts.

Of course, in the year ahead we must continue to work together to build on what we have achieved and implement what we have agreed. I look forward to updating the House in that regard in the months ahead. However, we should also take the opportunity of Europe Week to look beyond the challenges and consider what has brought us together. The European Union's 28 member states and 504 million people are bound together by shared interests, shared values and a shared future. Together, we are clearly more than the sum of our parts and together we will make the continent and our world a better place. The European Union is a force for good and the Government is proud to be among its most committed supporters.

7:15 pm

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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I am delighted to have the opportunity to address the House in Europe Week in what is, undoubtedly, an important year for the European Union. This is a time of transition in Europe and, as we put the crisis behind us, we need to look ahead at the challenges that remain. As the Taoiseach and many commentators have noted, we again find ourselves in a time of institutional change. A new European Parliament will be elected this month, to be followed by the appointment of a new President of the European Commission and a new college of Commissioners. There will also be a new President of the European Council and a successor to Catherine Ashton as High Representative for Foreign Affairs and Security Policy. These changes have growing significance for us all because of the enhanced roles of the European institutions and our ever-increasing interdependence within the European Union and the euro area. While much of the focus in recent years, since the advent of the recession, has been internal, recent events on Europe's borders have served as a stark reminder of the necessity in a fast-changing, multi-polar and often unpredictable world for the Union to act in unison and speak with one voice. The European Union strongly supports the international rules-based system founded on the principles of human rights, justice and respect for international law. This rules-based order is our best guarantee of stability, security and prosperity. What happens beyond our borders can and does directly affect us in Europe, as the crisis in Ukraine clearly demonstrates.

The Taoiseach has spoken about the importance of seeking a negotiated political settlement to the crisis in Ukraine. To that end, the Government strongly supports High Representative Ashton's call on all parties to the joint Geneva statement of 17 April to ensure its terms are fully implemented, including by using their leverage on illegal armed groups to stop violence and provocation and make them hand in their arms. The European Union will continue to be actively engaged in international efforts to facilitate a peaceful and negotiated solution to the crisis, supporting initiatives involving the United Nations, the OSCE and others to that end. At its meeting on 14 April the Foreign Affairs Council expressed strong support for the holding of free and fair presidential elections on 25 May. Ireland is sending a team of observers to Ukraine to help achieve that objective, one which will allow the Ukrainian people to determine their own future and help to build trust and confidence across the country. It is in the interests of the entire region that a sovereign, prosperous, stable, democratic and inclusive Ukraine emerges from the current crisis.

Events in Ukraine remind us of the core achievement of the European Union in creating a stable, democratic and prosperous Europe. We have achieved this by working together in a spirit of mutual co-operation and solidarity, putting ancient enmities behind us. Throughout the crisis, member states and the shared institutions we have created worked together to restore stability. It was not easy and many critics predicted failure, but the European Union has come through stronger and better equipped to meet the challenges of the future. This includes real progress towards banking union, reflecting agreement on what is necessary for both restoring normal flows of lending to the real economy and ensuring there will be no repeat of the current crisis. The Single Supervisory Mechanism will take effect from the beginning of November, followed by the Single Resolution Mechanism from the beginning of 2015. The European Semester will also play a crucial role in strengthening co-ordination of national economic and budgetary policies towards the overarching objective of supporting growth and jobs.

It is clear that economic conditions across Europe are improving. Last year saw GDP in both the Euorpean Union and euro area back in positive territory for the first time since late 2011. Many member states, including Ireland, have returned to net job creation and this year will see a return to net employment growth for the European Union as a whole. However, unemployment remains unacceptably high at around 11% for the European Union and 12% for the euro area. This is at the heart of the growth in support for those parties which reject Europe without plausibly explaining how member states confronting recession, climate change and the need to trade freely within each other's markets and with the wider world on a fair basis could do better in acting alone.

This is not to deny the challenge, namely, that there is more we can and must do to support a stronger, EU-wide recovery in the period ahead. This means unlocking a new wave of investment for job creation and growth.

The recent spring European Council took stock of the Europe 2020 strategy. Europe 2020 is the EU strategy to support growth that is smart, sustainable and inclusive. It is focused on five targets - employment, innovation, climate and energy, education and social inclusion. These are translated into specific goals for each member state and progress is monitored annually. It is clear that Europe's performance against these objectives is mixed and has been overshadowed by our need to respond to the crisis. This is the right time to develop a strong re-engagement with Europe's post-crisis growth strategy, on which a full public consultation will happen in the coming months.

When Commission Secretary General Catherine Day met the Oireachtas Joint Committee on European Affairs in January, she emphasised the importance of strong stakeholder engagement with this renewal of the Europe 2020 strategy, including, of course, from national parliaments. Work in this area will be supported by pressing forward on the Single Market and external trade agendas, restoring normal lending conditions through a fit-for-purpose financial sector, creating stronger business networks around our research and development investments and ensuring the supply of skills is aligned with what the market needs. At the same time, we have to ensure the European Union is doing things right and doing the right things. That is why new steps in the area of regulatory fitness are so important - withdrawing unnecessary proposals, simplifying what is already in place and repealing what is out of date. This is an issue to which the European Council will return in June.

The European Investment Bank will play a key role in supporting the new wave of investments needed to deepen the economic recovery under way. This €10 billion increase in its capital base - agreed to as part of the Compact for Growth and Jobs - will support a 40% increase in its lending capacity in the period 2013-15, bringing annual EIB lending volumes to between €65 and €70 billion. There was almost €1.2 billion worth of EIB project signatures and loan approvals in Ireland in 2013 - double what was approved two years ago. I see room for continued and strengthened EIB support, including in the area of access to finance for SMEs. This will remain a top priority for us in the coming months, including the establishment of a dedicated initiative to assist with the provision of finance for exporting SMEs, as provided for in budget 2014.

While creating the right conditions for new job creation across Europe, we must also equip young people with the skills needed to fill them. It is clear that there is a shared challenge across developed economies in adapting the education and training systems to the reality of the 21st century. That is why getting agreement on the key principles of youth guarantee schemes ranks among the most important achievements of last year's Irish Presidency. We finalised our own initial youth guarantee implementation plan in December and published it at the end of January. It will be a phased roll-out initially, targeting those at greatest risk of long-term unemployment. When fully rolled out, all young people will receive a good quality offer of employment, continued education, an apprenticeship or a traineeship within a period of four months of becoming unemployed or leaving formal education. We have also set a clear path for returning the economy to full employment through the medium-term economic strategy produced in December.

Over 60 years ago Robert Schuman recognised that Europe would not be made all at once or according to a single plan; rather, it will be built through concrete achievements which first create a de factosolidarity. The events of the past six years, as much as those of the past six decades, surely prove his wisdom and prescience. His early insight remains no less relevant today and can continue to guide our shared efforts in the coming months and years.

7:25 pm

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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Commemorating the Schuman Declaration through Europe Day is rightly focused on stepping away from the day-to-day debates on policy proposals. It is an invitation to us all to look instead at the bigger picture, the fundamental achievements and directions of what remains the most successful inter-state organisation in history. The European Union has many failings, but they come nowhere near outweighing the positive contribution it has made to a continent which was once defined by near-permanent conflict and widespread poverty. It has enabled rising standards of living which would have been impossible if every member state had stood alone. The Union's critics are fully entitled to criticise it, but, equally, they undermine their own arguments when they refuse to acknowledge the sustained progress in many areas enabled by it.

The events in Ukraine should concern us all. The people of Ukraine want to live in an independent democracy. They have repeatedly been let down by their leaders and are now facing a conflict directly fomented by a former imperial power which does not recognise the right of Ukraine to be a sovereign and genuinely independent state. Ukraine has already been partitioned by Russia which has actively encouraged the Russian-speaking population in the east of Ukraine to stand against the majority. Europe has a moral duty to stand against this aggression and the idea that one state can partition another in this way. On this island, we have seen that encouraging divisions does immeasurable long-term damage. Further significant sanctions are becoming both reasonable and, unfortunately, inevitable.

I pay tribute to the Irish personnel who have participated in the work of the OSCE in Ukraine and elsewhere. They are a reminder that Ireland continues to build on its proud record of promoting the peaceful reconciliation of disputes. They also disprove the myth that Europe is or wants to be an aggressive military superpower. It continues to respect the neutrality of member states which do not want to participate in a military alliance and enables these states to better participate in tasks associated with preventing conflicts and protecting human rights.

In many of our debates on European issues there can be a real imbalance. We hear a defence of whatever has been agreed to by leaders sitting in the Council and then attacks on everything they have and have not done. There is a false division at the heart of debate whereby there is an expectation that one must defend or oppose Europe, with little room in the centre ground. As I have said in a series of lengthy policy statements on Europe, my party believes there must be a space for "critical friends" – those who are absolute in their belief in the idea of a union of European states but who reserve the right to criticise the decisions and directions set by its leaders.

For the past six years the European Union has experienced what is by far the biggest crisis in its history. The economic and financial crises have been added to by a political crisis. While there are welcome signs that Europe's economy is recovering and that stability has returned to its financial system, major concerns remain. Core flaws in the design of Economic and Monetary Union have not been addressed and the new banking union is incomplete and insufficient. Growth forecasts suggest unemployment will remain high, with youth unemployment stuck at a level which will directly lead to long-term social problems. In spite of this, the leaders of the Union, especially the Heads of State and Government who meet in the Council, are expressing their satisfaction with how things have developed. They continue to show a lack of ambition or urgency.

The only person in a leadership role who has risen to the crisis is Mario Draghi, president of the European Central Bank. He assumed his current position more by accident than design. It was part of closed negotiations between a few larger states. The Taoiseach admitted here in 2011 that he had not even talked to Mr. Draghi and did not know his views before agreeing to his appointment. In spite of this, President Draghi has implemented changes in policy which are the direct and primary reasons the sovereign debt crisis has eased and some growth has returned to Ireland and the eurozone. It is a pity that the need of governments such as our own to promote themselves means that they have failed to acknowledge the central role of one EU institution in helping member states. Of course, the political approach of the Government also means that it has not acknowledged the central role of failed and now abandoned EU policies in Ireland requiring the troika's support. The success of President Draghi's policies has been confirmed in recent days by the exit of Portugal from its support programme on 17 May 2014, the return of Greece to the debt markets and the low borrowing rates faced by Spain and others who were on the edge of requiring support.

The Government recently deployed its spin machine to manipulate an OECD report on its jobs plan. It ignored two very important statements in the report which undermined the Government's spin. First, it stated there was no direct evidence of the link between the plan and the jobs which the Government was claiming to have delivered. Second, more importantly, it stated there was direct evidence that the jobs being created were linked to improved economic conditions in Europe.

It is a pity the Government's eagerness to promote itself is getting in the way of acknowledging how central EU recovery has been to our own. This is not to say the ECB's policies are all what they should be. It remains the case that Ireland has not received full justice. Greece receives the profits from ECB holdings of its bonds and Ireland should do so, too. In addition, there is the issue of conversion of the promissory notes into bonds held by the Central Bank of Ireland. From the moment the deal was announced I pointed out that the Central Bank of Ireland should be allowed to hold them to maturity because selling them early would cost us billions and wipe out the entire benefit of the deal to Ireland. The Taoiseach has repeatedly dismissed concerns others and I have raised on this issue, but the evidence is incontrovertible that there is pressure on the Central Bank of Ireland to sell them early. It is long past time for the Government to state this would be unacceptable.

While the situation with the economic and financial crises facing the European Union is undeniably better, the political crisis is getting worse. In most countries parties and individuals promoting anti-EU sentiments, frequently in an ugly populist way, are doing well. The extremes of the right and the left are united against the European Union and in challenging them there has been no strong political leadership. In fact, many leaders have indulged anti-EU sentiment rather than confronted it. The decision of the British Conservative Party to seek a renegotiation of the United Kingdom's membership as a prelude to an in-out referendum is hugely significant for Ireland. Even though their review of competencies is disproving anti-EU arguments, the destructive and negative debate which is mostly confined to England continues. Ireland and others need to make their positions clear - we should never support the agenda of hollowing-out the European Union and reducing it to a free trade zone. It is only a union which invests in its regions, supports equality, demands decent working conditions and protects its citizens which benefits Ireland. We must not stand on the side lines when these fundamental issues are being debated. We must not allow the Tories to believe they can gain all of the benefits of access to the European market, with none of the responsibilities of common standards. We must stand against the race to the bottom and in favour of the vision of a Europe which sees economic development as an enabler of social progress. If we have learned one thing in recent years it should be that progress in Europe is not something that is inevitable - it must be worked for. The vision set out in the Schuman Declaration 64 years ago is as relevant today as it ever has been. What is missing is the leadership to act on that vision.

7:35 pm

Photo of Seán CroweSeán Crowe (Dublin South West, Sinn Fein)
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I begin by apologising for the absence of my colleague, Deputy Gerry Adams.

This Friday, 9 May, marks the EU celebration of Europe Day. It marks the date of the Schuman Declaration in 1950 which proposed the pooling of French and West German coal and steel industries and which led to the creation of the European Coal and Steel Community. The people of this state voted to join what was then the European Economic Community on 10 May 1972. Two weeks after Europe Day, on 23 May, Irish people will enter polling stations and decide who they want to represent their interests in the European Parliament. As with the last election, the feeling being expressed on the door step is that the people want change. Some say they are tired of our representatives being bullied and blindly submitting to the wishes of the bigger EU countries. It is most worrying that many do not appear to even know who their MEPs are. That is part of the disconnect and difficulty we need to overcome. Irish people are fed-up with the continuation of EU-enforced austerity policies, while the Government and its MEPs continue to vote for and champion these crippling policies.

The electorate was promised seismic shifts and game changing deals on banking debt, both inside and outside the House. They were told that this would mean the separation of banking debt from sovereign debt and that in future bank crises the ESM would directly recapitalise banks and that the sovereign would not be expected to take on a bank bailout. An tUachtarán Higgins has said on numerous occasions that there is a flaw in the economic model and the social and political mores of EU leaders, but the Government and its MEPs continue to champion them. Voters across the island have a real choice on 23 May between sitting MEPs who have supported the European institution's austerity policies at every turn or Sinn Féin candidates who have consistently set out a real political, economic and social alternative. I believe the people of Ireland need to send a strong and clear message about their desire for change on 23 May.

Sinn Féin's policies towards the European Union have always been focused on critical engagement. Where measures are in the interests of the Irish people and the peoples of Europe, we support them and seek to further them. However, where they are not in the interests of the people, we have opposed them and campaigned to change them. We want to work with everyone to create an inclusive Europe which reflects the needs and aspirations of all its peoples, not just the few. We will not, however, support a drive for further centralisation of powers in the hands of an unelected EU bureaucracy. Irish citizens do not want to live in a province of a European super-state in which technocrats take decisions with no accountability. Sinn Féin has been consistently critical of the European project's federalist character and the profound lack of democracy at its core. We do not support a European Union in which a small number of large member states take it upon themselves to dictate economic, security or other policy to smaller states. I know that, if elected, Sinn Féin's EU election candidates will work to secure EU investment for job creation, a deal on legacy banking debt, a real alternative to austerity, the protection of workers' pay and conditions, action on climate change, Irish neutrality and promote Irish unity and EU support for a Border poll. We support a Europe of equals, a social Union in which all states act together in common cause and interest.

The European project was created to build solidarity between European countries and avoid continued inter-state violence and war. Europe directly experienced two World Wars, the carpet bombing of civilian areas, the flattening of towns and cities, with whole communities nearly wiped out through genocide, fascism and division, yet we moved beyond this towards reconciliation. EU countries may not be facing the threat of fighting each other, but we are seeing the unemployment, homelessness, emigration and food queues that are reminiscent of those dark days. There is a growing awareness that cutting expenditure and increasing taxes will not get the European Union out of this disastrous financial position. The European Anti-Poverty Network, EAPN, reported that the incidence of poverty in the European Union had increased by over 6 million since 2010 to 124.5 million people, despite the target being to reduce it by at least 20 million by 2020. What is needed is a focus on job creation, growth and protecting the most vulnerable in our societies. Unilateral austerity will continue to drive the European Union into a destabilising abyss from which it might never recover. As the European Union faces into the heart of this crisis, what we need is greater solidarity between EU citizens, not the strong versus the weak model being promoted.

As we approach Europe Day, it is extremely important that we do not forget about the escalating crisis in Ukraine where the situation has gone from bad to worse. Incidents in the past week signal that it may be sliding into civil war. The violence and instability have drastically spread from eastern Ukraine to other parts of the country. On Friday 42 protesters were killed in the multi-ethnic south-western Black Sea port city of Odessa after clashes between pro-Russian and pro-EU groups. This included the murder of 38 pro-Russian protesters by - according to media reports- extreme right-wing Ukrainian nationalists when the trade union building in which they were taking shelter was torched. The last seven days have been the deadliest since the separatist uprising began and have transformed the conflict by hardening positions and reducing the room for peace. As we remember Europe Day and how Europe came together from the ashes of the Second World War to rebuild and revitalise itself through peace, solidarity and co-operation, we must also remember Ukraine.

The geopolitical posturing and advances for self-interest by the European Union and Russia in Ukraine must stop now. It sounds simplistic, but a radical change in approach which places Ukrainians at the heart of their future political and economic decision-making, free from outside pressure and intimidation, is the only way to ensure peace and stability will return to Ukraine.

This Friday, 9 May, marks the celebration of Europe Day. There will be celebrations in some parts of Europe, although I do not know how much celebrating there will be in this part of the world. The celebration of Europe Day has never really been on my agenda, but there have been hugely positive gains from being involved in the European Union. Given its historical background, it can play a major and positive role in trying to bring about peace and reconciliation around the world. That is the direction many people in Ireland, particularly after the conflict we have been through, want to see the European Union taking. They want to see it moving forward and member states working together in solidarity to try to bring peace, stability and economic prosperity to peoples around the world.

7:45 pm

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
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The next speaker is from the Technical Group. I understand Deputy Mick Wallace is sharing time with Deputy Thomas Pringle. Is that correct?

Photo of Mick WallaceMick Wallace (Wexford, Independent)
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Yes.

Today in Brussels Finance Ministers are discussing the financial transaction tax. Eleven EU countries seem intent on signing up to it, including two of the biggest member states, France and Germany, as well as two of the bailout programme countries, Portugal and Greece. I am disappointed that Ireland is not doing the same. The Minister for Finance, Deputy Michael Noonan, has argued on several occasions that the introduction of a financial transaction tax could displace financial sector activity. However, little concrete evidence has been brought forward to support this assertion. As UK researchers have highlighted, financial companies still enjoy considerable tax advantages in Ireland. The financial transaction tax would only be levied on a part of their activities. When it is considered that the tax on 1 million derivative trades would come to only €100, it is hard to see how this would undermine an entire sector.

Given that the financial sector played a major role in creating the economic crisis and the massive socialisation of private debt that has taken place in recent years, there is strong support across Europe and elsewhere internationally for moves that would force the financial sector to make a fair contribution to economic recovery. In addition, as the European Commission has pointed out, the sector is under-taxed in comparison to other sectors. The many benefits of a financial transaction tax include the fact that it would reduce the volume of high risk financial transactions and, therefore, help to prevent future crises. It would also help countries to monitor their financial sectors in a better fashion. As we, unfortunately, know, governments and state agencies had little insight into the scale and nature of financial transactions as the 2008 financial crisis unfolded. This lack of information inhibited a comprehensive response to the crisis.

A financial transaction tax would also level the playing field for JobBridge SMEs which are not exempt from VAT. This exemption means that the financial sector enjoys preferential treatment over other sectors of the economy. This is a questionable policy decision, given how important the SME sector is in terms of employment. Over three quarters of the population are still involved in the SME sector, despite the difficulties it is going through.

An interesting article by Mr. Chris Huhne was published in The Guardianlast week. Mr. Huhne is a former Liberal Democrat Cabinet Minister in the United KIngdom who had to resign because he had passed on a couple of penalty points to his wife. For some strange reason, the English do accountability. It has been proved today that the Minister for Justice and Equality broke the law, but everyone seems to be okay with it. Seemingly, we do not have a problem with it here. Mr. Huhne's article focuses on the French author Thomas Piketty's book Capital in the Twenty-First Century. I have only read an analysis of the book to date, but it is very interesting. In the book Mr. Piketty challenges the conventional post-war view that capitalism was developing in a balanced way such that growth would float all boats. This complacent assumption was true in the post-war reconstruction period but only as a consequence of war and policies adopted to cope with the shocks of war. The physical destruction of wealth by war was followed by a further destruction of private wealth, as governments reduced their own war debts through inflation. Mr. Piketty has revived Marx's belief that capital would accumulate and become concentrated in ever fewer hands. Mr. Piketty, arguably one of the world's leading experts on tax and wealth, bases his argument on an analysis of wealth dating back two centuries and tax statistics in many countries dating back to the first progressive income tax under a Liberal Government in Britain in 1909. He says, "There is no natural spontaneous process to prevent destabilising, inegalitarian forces from prevailing permanently." He shows that in rich countries, at the frontier of technology and skills, the growth of incomes has been between 1% and 2% a year. Meanwhile, the rate of return on capital averages at about 4% to 5% a year. Therefore, those who draw their income from capital returns will outstrip wage earners and inherited wealth grows faster than output and income. That same philosophy is something about which the Government should think. Part of the housing crisis is related to the fact that people were allowed to accumulate incredible profits on the sale of land. Only a handful of people controlled most of the development in Dublin city, which, sadly, is still true today. In 1974 the Kenny report recommended that the price of development land only be allowed to rise a certain percentage above the price of agricultural land. It would make a lot of sense for the Government to bring forward such a measure.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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When I first saw this item on the agenda, it was entitled, Statements on Europe Day, but now I see it has been amended to read, "Statements on Europe Week". I notice that two Europe Days are being celebrated this week. The Council of Europe marks Europe Day on 5 May. The Council of Europe is an international organisation that promotes co-operation between all the countries of Europe in the areas of legal standards, human rights, democratic development, the rule of law and cultural co-operation. Founded in 1949, it has 47 member states, with over 800 million citizens participating in it. We should celebrate Europe Day on 5 May. This House should be lauding that day because the Council of Europe has meant a lot to this country. It has allowed citizens whose court cases failed in this state to go to the European Court of Human Rights, ECHR, for redress. The ECHR is an institution of the Council of Europe, not the European Union, as a lot of Irish people seem to mistakenly consider it to be. Many politicians like to allow Irish people to continue to think along these lines. People have been able to have their rights vindicated in the ECHR which has had a huge impact on our national laws, most recently in the Protection of Life during Pregnancy Bill which arose from an ECHR ruling, not from a ruling of the European Union.

The other Europe Day being celebrated this week and, unfortunately, the one this House wants to celebrate and commend is Friday, 9 May. It commemorates the 1950 United Nations Universal Declaration of Human Rights. When it was introduced, Jean Monnet said it was the first step in the federation of Europe. It is unfortunate that we are celebrating it in the House. The federation of Europe started in 1950 with the European Coal and Steel Community between Germany, France and the Benelux countries. It has proceeded through Ireland's accession to the European Economic Community, as it was in 1973, and the formation of the European Union. In 2007 European Commission President Barroso said, "... I like to compare the EU, as a creation, to the organisation of empire. We have the dimensions of empire." That is the project on which the European Union has embarked. It is the project into which successive Irish Governments and all of the major Irish political parties like to lead the people, blindfolded.

In today's contributions, rather than looking at the overall direction of Europe, we hear talk about recovery from the crisis and what the next European Council will do. It is stuff that would put the average Irish person to sleep. Their eyes glaze over when they hear Europe being mentioned because it is so mundane and drawn out that they are not interested.

The result is that there is no discussion of the direction Europe is taking, where the process will end and where Europe wants to see it end. The end of the process is a fiscal union, a federation of European states and a united states of Europe. That is the project in which we are participating and the one into which the Government and its predecessors have tried to lead the people blindfolded and asleep by stifling discussion about the overall direction of Europe.

We have seen it recently with the crisis in Ukraine where the European Union facilitated and encouraged the overthrow of an elected government and supported fascist participation in the interim administration. That crisis will now be used to further develop the military aspirations of the European Union. We have even heard, on 14 April, Catherine Ashton ask European Ministers that if Ukraine is not a trigger to get serious about spending, pooling, sharing and smart defence, what more do we need to get real. That is the agenda - the militarisation of the European Union - Catherine Ashton, the Commission, the large member states and the Government want to see pursued to provide us with all the trappings of empire. As Angela Merkel wished for in 2010, we could even have a European army in the future.

These are the issues we should be discussing in the context of the overall direction of the European Union when we discuss Europe Day and Europe Week, a celebration of the Schuman Declaration of 1950. I hope we will some day have a discussion in the House on the Council of Europe's Europe Day which would be something in which we could all participate.

7:55 pm

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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This year Europe Week is at a significant juncture, falling in the middle of the campaign for the European elections which will take place throughout the European Union between 20 and 23 May. Campaigns are well under way. While it may be tempting for some to sell the election as an opportunity to cast a protest vote on domestic policies, to do so is disingenuous and a wasted opportunity. The election is about European issues and the next five years in the European Union. It is not about domestic policies or politics today.

Citizens need strong representation at European level. We elect our MEPs to represent us in the increasingly relevant and powerful European Parliament. Many of us will remember when the Parliament was not as powerful as it is today. It is very powerful today and becoming more so, in which regard it is important to elect MEPs who can adopt positions on proposed European policies and legislation on our behalf with the governments of the member states which are represented on the Council. MEPs play a vital role in connecting citizens directly to the European Union.

The importance of the European Parliament is clear when we reflect on the parliamentary term which has just gone by. During the term of office of MEPs from 2009 to 2014, they have been legislating on our behalf in key areas directly relevant to Irish citizens, including the creation of a banking union to ensure taxpayers' money is never again used to bail out the banking system. The European Parliament was instrumental in bringing about a youth guarantee for young unemployed people in Europe and securing additional funding for the scheme.

During the parliamentary term which will run until 2019 it is likely that we will see some proposals emerge for changes to the existing treaties. We will almost certainly see more significant changes for those countries that share the single currency, the euro, particularly in relation to the further development of an economic and fiscal union. Crucially for Ireland, the question of the United Kingdom's relationship with the European Union will be addressed during this period. A great deal is at stake in the next five years.

To ensure we have sufficient democratic legitimacy and accountability in the European Union, we first need a strong European Parliament with a strong mandate working on behalf of citizens and capable of holding the European Commission to account. So too at national level, we must ensure the Oireachtas is fully equipped to a play a full role in the scrutiny of draft European legislation and to hold the Government to account for the decisions it takes at European level through the Council. In this regard, I welcome the Government's review of Oireachtas structures for the scrutiny of EU proposals which the Minister of State, Deputy Paschal Donoghoe, is leading.

The European Union remains central to the achievement of Ireland's domestic and foreign policy objectives, the promotion of our values and interests and peace and prosperity throughout Europe. There is no doubt that the Union has become more complex in recent years. I am pleased that the review of Ireland's foreign policy and external relations being led by the Department of Foreign Affairs and Trade is examining how Ireland engages in the European Union. The review will be critical to ensuring Ireland has the right strategic approach in place to maximise its contribution to and benefit from the European Union.

Critical to the achievement of policy objectives in the future will be increased Oireachtas engagement in political dialogue with the European Commission and in dialogue and co-operation with the European Parliament and other national parliaments. I see the respective roles of the European Parliament and national parliaments in the Euorpean Union as distinct and complementary. It will be important to build on this dimension once the newly elected European Parliament is in place. We must strive to make better use of our MEPs to increase their visibility and better integrate them into the work of the Houses of the Oireachtas to provide for continuous dialogue and feedback.

Last week I had the opportunity as Chairman of the Joint Committee on European Union Affairs to attend a parliamentary conference in Riga, Latvia, to mark on 1 May the tenth anniversary of Latvia's accession to the European Union. On that occasion I shared some of Ireland's experiences of EU membership over 41 years and learned of Latvia's experiences in the past ten years. Despite the different time spans, the number of shared experiences was striking. There was experience of an economic boom, followed by a property bubble and severe contraction in the economy, leading to high levels of emigration. All contributors at the conference were in agreement that the experience and destiny of countries within the European Union rested largely in the hands of each member state. It is for each country to maximise its contribution to the Union and thereby reap the political and societal rewards that membership offers. While Ireland has successfully managed the process to date, it is one we must renew our commitment to on a continuous basis to secure our interests in an every more complex Union. This year Europe Week provides us with an opportunity to look ahead to the next five year period and the further development of the European Union in that time.

The Joint Committee on European Union Affairs set out in February its work programme for the year, flagging the main pieces of work it intended to progress. Since the beginning of 2014, we have contributed to the Government's review of foreign policy and the review of structures for the Oireachtas scrutiny of European matters. Reports have been prepared on both reviews. The joint committee is considering the issue of voting rights for Irish citizens who have exercised the right to live and work in another EU country and we will be preparing a report on the issue following the conclusion of a number of hearings in the coming weeks. This comes on foot of a recommendation from the European Commission in January that Ireland do more to ensure its citizens were not disenfranchised when exercising a right they enjoyed under the EU treaties, the free movement of persons.

The joint committee is also looking at Economic and Monetary Union and what it might mean for Ireland, with a particular focus on democratic legitimacy and accountability. The committee will review the new rule of law mechanism for the European Union which the Commission put forward earlier this year. It will also look in greater depth at the implications for Ireland of a possible changed relationship between the United Kingdom and the European Union. As always, the committee will continue to build on its bilateral and multilateral engagements with our counterparts in national parliaments throughout the European Union. The national committees will foster better relationships and inform each other of EU scrutiny activities and the views of our respective parliaments on key matters. We will meet again in Athens in June with the other member state committees as part of the COSAC meetings. We will also use the opportunity to meet our colleagues in Albania and Montenegro.

As the Minister of State, Deputy Paschal Donohoe, knows, the issue of enlargement, particularly concerning the former Yugoslavian countries, is high on the agenda of the committee. The committee has a full agenda and is keen to be fully engaged in European issues through scrutiny and examination of proposals and bilateral and multilateral relationships. We look forward to continuing to do so.

8:05 pm

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I thank all Members for their contributions. I will respond to each in turn and offer some views on the points made. Before doing so, I want to frame the debate with figures that provide the.backdrop to the discussion and some of the challenges Europe and Ireland will face together in the years to come. The first concerns Europe's share of the world's population. At the beginning of 1900 Europe represented nearly one quarter of the population of the world. Currently, it represents 12% of the global population and by 2050 it will represent 7%. In the economic context, depending on how it is measured, Europe represents four or five of the ten largest economies in the world. By 2050, based on current trends and a degree of judgment, it will have two of the ten largest economies in the world. We will, therefore, see a large shift in Europe's share of the world's population and wealth. Much of the change will happen for positive reasons. It will happen because purchasing power in other countries and regions is beginning to change and develop. Europe and Ireland have invested in and supported strongly the development of these changes. Much of the development is due to the fact that the rest of the world is getting healthier, as demographics change, and Europe's place in the world will change from where it has been historically, let alone from where it is now.

I offer these figures to colleagues to give a brief sketch of the change likely to take place across the world in our lifetimes, let alone the lifetimes of generations to come. This will offer major opportunities and pose major challenges to Ireland. We are very much aware of the acute challenges faced in the past five or six years in response to the major changes taking place at such speed within the European and global economies and Ireland. Due to the shifts outlined, many of which will happen for positive reasons such as the changes in demographics and technology and positive developments in other economies, there will be equal, if not greater, challenges in the period to come. I emphasise these changes because they offer a new rationale for the benefits of the European Union. They offer a practical benefit in supporting the level of integration, while being open to thinking about what will happen in the future. In the face of the changes mentioned, which provide the backdrop to the changes outlined by Deputies, given the scale of the challenges and the opportunities, the only way any country in Europe, no matter how small or big it is, can respond is by working with others and sharing the challenges and opportunities we face collectively and taking advantage of or rising to them. In a number of my contributions in the Dáil and elsewhere during my months in office, I have pointed out that all roads lead to that point and the question of how countries like Ireland respond to these opportunities, given their scale. The best vehicle for us to respond is through the European Union. The strongest rationale for supporting strong participation in the European project is a national one. On its own, Ireland could do very well in the face of the changes I have outlined, but it can do even better based on how we work with our neighbours. The European Union offers the best way of coming up with that model and mode of co-operation. Despite the challenges the Union has faced in recent years, if it did not exist, in the face of what I have referred to, we would be working to create it now or in the future. The instincts that guided Schumann, Monnet and great political figures from across the political spectrum are as true now as they were then.

The themes touched on by each Deputy relate back to that level of change. Deputy Micheál Martin made an important point in stressing that between outright opponents and outright supporters of the European Union there must be a space for those who are supporters of what it has achieved in the past and is achieving but who want to be critical and offer differing views about its direction. The point is important because the absence of that space leads to the creation of political forces, as seen elsewhere, that could, if not challenged, pose great challenges to the benefits the European Union has managed to achieve.

Deputy Seán Crowe referred to the need for a social Europe and for us to respond to the challenges of equality and opportunity. Where I differ is that I believe the European Union, as constituted and regardless of how it may change in the future, still provides the best platform for individual countries to respond to the challenges he correctly identified. I differ from him on the idea that the European Union imposed austerity on member states. Regardless of whether Ireland had been inside the European Union, we had reached a gap between the spending to which we had committed and the taxes we were taking in and no one was willing to fund the difference. That was one of the key reasons for the major difficulty the country has endured in recent years. The challenge was not one imposed on us by the European Union or any other body. It had to do with spending and taxation decisions made in Ireland. While saying this in reference to the point made by Deputy Micheál Martin, I acknowledge design flaws and mistakes in the mechanisms in place to create and supervise a single currency, most notably the absence of equivalence for large European banks and the absence of the measures and architecture being created in terms of how budgets are created and recognising how decisions one country makes can have a major impact on another through the shared single currency.

Deputy Mick Wallace referred to Capital in the Twenty-First Centuryby Thomas Picketty, a book that is getting a lot of coverage. I have nearly read most of it and challenge his analysis about the challenges that can be posed when the rate of return on capital is substantially ahead of the rate of return delivered when national economies are growing. For me, much of the response can best be delivered through membership of something like the European Union because it offers a mechanism whereby the efforts of individual member states can be co-ordinated to deal with the difficulties of one country in taking a measure on its own and not being supported by or being challenged by decisions other countries can make.

I endorse and recognise the huge work being done by Deputy Dominic Hannigan through the Oireachtas Joint Committee on European Affairs. I appear regularly before the committee. The point the Deputy made about the need to support the political legitimacy of the European Union is very important. If we do not keep going back to the well of popular support the peoples of Europe offer to any political project, whether national or European, we run the risk of eroding that foundation in the future. The work parliamentary committees all over Europe do, including that of the Deputy, plays an extremely important role in scrutinising the work of governments and ensuring popular support and its foundations are constantly uppermost in the minds of those of us involved in the European project.

Photo of Peter MathewsPeter Mathews (Dublin South, Independent)
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On a point of order, while statements to mark Europe Week are important, Members who do not belong to parties or the Technical Group did not get the opportunity, even for less than one minute, to make an observation or a statement or contribute to the debate, which is a tragedy. I sat through the whole debate and sought 45 seconds to make a brief contribution, but I was not allowed do so.