Pat Gallagher (Donegal, Fianna Fail)
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I understand it is proposed to take Questions Nos. 28, 29 and 32 together. According to Standing Orders, the Member who tabled the first question in the group should introduce them.

Lisa Chambers (Mayo, Fianna Fail)
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Will the Leas-Cheann Comhairle clarify how that will work?

Pat Gallagher (Donegal, Fianna Fail)
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Deputy Chambers will introduce the questions and the Minister of State will say which ones are being grouped.

Lisa Chambers (Mayo, Fianna Fail)
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28. To ask the Taoiseach and Minister for Defence the implications for Ireland of the European defence action plan; and if he will make a statement on the matter. [40072/16]

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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29. To ask the Taoiseach and Minister for Defence if he will be attending the meeting of the European Council of Ministers in Brussels on 15 December 2016; and the Government’s position on the European Commission's European defence action plan which is to be discussed there. [39978/16]

Eamon Ryan (Dublin Bay South, Green Party)
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32. To ask the Taoiseach and Minister for Defence the implications for Irish defence policy in view of the recent announcement of a European defence action plan. [40172/16]

Lisa Chambers (Mayo, Fianna Fail)
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What are the implications for Ireland of the European defence action plan? Clearly, the EU is facing an unprecedented set of security challenges both within its borders and outside.

It is my view that this plan is a reaction to those threats. I would like a statement from the Minister of State please.

Paul Kehoe (Wexford, Fine Gael)
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I propose to take Questions Nos. 28, 29 and 32 together. The College of Commissioners adopted the European defence action plan on 30 November last. This is simply a proposal from the Commission. It has not been discussed or agreed by the member states or the European Parliament. As such, it has yet to go through the wide ranging and extensive EU procedures before any part of it becomes a reality.

The aim of the plan is to explore how EU policies and instruments can ensure that the EU's industrial and skills base will be able to deliver required defence capabilities in view of current and future security challenges. As part of this plan, the Commission has proposed the creation of a European defence fund. In addition, the plan aims to offer supports to small and medium sized enterprises, SMEs, start-ups and other suppliers to the defence industry. There are also proposals in the plan to increase transparency in relation to defence procurement under the existing EU procurement directives.

The purpose of the defence fund is to promote research and innovation and contribute to the strengthening of the European defence technology and industrial base, and to further stimulate the development of key defence capabilities. The Commission has proposed that the fund would have research and capability windows.

In the research window, it is proposed that €90 million in funding will be made available for collaborative defence research projects over the period 2017-20 in what is known as the "preparatory action". The Commission also proposed that, post 2020, a European Defence Research Programme will be established which will require funding of €500 million per annum. It should be noted that this has yet to be negotiated as part of the post 2020 multiannual financial framework.

Under the capability window, the establishment of a fund is proposed. The fund would facilitate member states in purchasing capability platforms together through the pooling of national contributions, where possible supported by the EU budget. The Commission estimates that this fund would be in the region of €5 billion per year. It is important to highlight that this would depend on individual member states agreeing to initiate joint projects which they would co-fund from national resources. To date, no such ambition on pooling resources across the union has been realised.

For certain member states in the EU, defence is a significant contributor to their economies, representing an industry of €100 billion with 1.5 million direct and indirect employees. Ireland does not have a defence industry, however this does not mean we do not need to equip our defence forces with advanced defensive systems or that we will not benefit from this action plan. The action plan puts forward a range of proposals designed to deliver additional capabilities for the common security and defence policy, CSDP, and to support and regulate the defence industry as another sector of the Single Market.

I am satisfied that the proposals in the action plan fully respect the EU treaties and the Lisbon protocols and pose no challenge to Ireland's traditional policy of military neutrality. There is also a clear recognition and reaffirmation that defence remains a member state prerogative. Decisions about expenditure, military capabilities, research and technology are matters for member states.

Lisa Chambers (Mayo, Fianna Fail)
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At the Bratislava summit in September of this year the leaders of the 27 member states concluded "We need the EU not only to guarantee peace and democracy but also the security of our people." I agree with the Minister of State that suggestions will be put to him today and in the future that this is somehow an attack on our neutrality and I reject that completely. It is important to bear in mind that the second Nice treaty introduced a provision into our Constitution affirming that we could not partake in common defence without further amendment to the Constitution. We in Fianna Fáil abide by that.

We also believe, however, that it is in Ireland's best interests to have defence forces that are fit for purpose and able to carry out their duties effectively. The demand for resources is challenging and if there are ways we can boost our defences and ensure there is in place a credible defence policy we should do so. If the European defence action plan can provide opportunities for efficiencies and for making our defence spending go further we should avail of it. Even by the standard of neutral countries our defence spending is very low. What will the Minister of State do to ensure our Defence Forces can take advantage of this plan?

Paul Kehoe (Wexford, Fine Gael)
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The Deputy is right to say that this does not put our neutrality in question. I agree ours is a changing society and the world is changing and we have to be ready for whatever eventuality happens. We have to have the best equipped army to be able to react to whatever is the situation. This is only a proposal from the Commission. It is to be agreed by the Council. I do not want, and it would be wrong of me, to make any commitment until I see the decision of the Council which then has to go through the European Parliament. I assure the Deputy that I take all her views and sentiments on board. I will be singing off the same hymn sheet as the Deputy.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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I listened with interest to the Minister of State's response to Deputy Lisa Chambers. Is the Minister of State aware that there is a defence or military industry in Ireland? On the Order of Business today a Deputy from the county where Timoney is based appealed for the purchase of more military equipment from Timoney. There is also a huge industry in respect of dual use goods, including some which go to Israel for military purposes.

There was a concern when the European Defence Agency was proposed in the Lisbon treaty that this was exactly where it was going. The Minister of State’s response to Deputy Chambers is quite pathetic because he is not willing to take a position. What is the Government's position on this proposal? We know the proposal is to increase EU spending on military goods in research and divert money away from its current use for social good to military spend.

Paul Kehoe (Wexford, Fine Gael)
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The European defence action plan refers to the creation of a European defence fund which consists of two distinct financial structures. In respect of the research window, Ireland recognises the need for investment to be made in defence research, particularly in innovative technologies and products and services which will assist the development of future capability requirements for our Defence Forces. The action plan proposes a €5 million annual budget for defence and dual use of research and development as a successor to Horizon 2020. This has yet to be negotiated as part of the post-2020 multi-annual financial framework. Ireland welcomes the reference in the European defence action plan to encourage the creation of synergies to boost innovation with civil economies such as cyber defence. Ireland has particular strengths in the areas of dual use and civil commercial technologies which can support defence capability.

Eamon Ryan (Dublin Bay South, Green Party)
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The Minister of State says this does not affect our neutrality but at a certain point it does and we are at that point with a €500 million per annum research budget which we want to tap into, and a €5 billion capability window to build up a defence industry.

As the Minister of State said, there are hybrid threats, cybersecurity threats and dual-use opportunities for which we will have these capabilities. However, it is increasingly drawing us in.

Just to focus on one specific question, the Minister of State said that he does not wish to contemplate the outcome of the Council meeting in advance. There is a proposal on funding and financing to the effect that the European Investment Bank, EIB, would have the capability of defence lending. That would be a shocking development which could have real implications for the EIB's ability to raise funds. No ethical fund would be able to invest in the EIB. The cost of lending would probably rise as a result. Does the Government intend to support any proposal that gives the EIB defence industry and arms industry lending capability? Does it think it better not to support that development or to be associated with it if the proposal is passed?

Paul Kehoe (Wexford, Fine Gael)
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I will repeat what I said in my original reply. I am satisfied that the proposals in the action plan fully respect the EU treaties and the Lisbon protocols and pose no challenge to Ireland’s traditional policy of military neutrality. There is also a clear recognition and reaffirmation that defence remains a member state prerogative. Decisions about expenditure, military capabilities, research and technology are matters for member states. We will consider the Commission's proposal. I am not going to indicate to what we are going to commit.

To address Deputy Chambers, we live in a very changing society. We have to be ready for every eventuality. We must have our Defence Forces equipped as best as they can be in order that they will be able to measure up and equal any other defence force. That is a real challenge for us. There are benefits for us in the proposal. We have to be able to equip our Defence Forces and that is the most important thing.

Pat Gallagher (Donegal, Fianna Fail)
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The Minister of State has exceeded his time.

Paul Kehoe (Wexford, Fine Gael)
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If the Deputy talks to any member of the Defence Forces, he or she will tell her that the most important thing is-----

Pat Gallagher (Donegal, Fianna Fail)
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There is an overall time limit.

Paul Kehoe (Wexford, Fine Gael)
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-----that they have the proper equipment.

Pat Gallagher (Donegal, Fianna Fail)
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Do Members agree to allow the three Deputies to ask supplementary questions and the Minister of State to answer them? Agreed.

Lisa Chambers (Mayo, Fianna Fail)
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Deputy Ó Snodaigh has said that this is about increasing military spending. The objective is actually to pool spending in order to increase efficiencies on the part of every member state that partakes in what is proposed. The European defence fund being proposed by the Commission represents a great opportunity for our country. We have a very tight military budget. I do not believe that we spend enough on our Defence Forces. They do not have the resources they need - through no fault of their own - to operate effectively.

There are two tranches to this: the research window and the capabilities window. The research window would fund collaborative research in innovative and strategic defence technologies. For example, technologies could include electronics, metamaterials, encrypted software and robotics. As a collective, we could achieve advances in technology. The capability window would support member states in joint spending. This is not about increasing the number of bombs or guns. We spend money on helicopters and other technologies for our Defence Forces in order that they can protect our citizens. We could pool resources to get a better price on those. Rather than taking the cynical view, there are actual savings to be made. Ireland is a small country with a small budget. To be able to pool collectively to create greater efficiencies and economies of scale is a good thing for Ireland. We need to recognise that. What is the Minister proposing to do to increase our ability of procurement in order to increase our capabilities?

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Rather than retaining spending at the current cost, the proposal is based on the fact that the EU as a whole has a decreasing military spend. That is a laudable result and is not to be lamented, nor should it be increased to create an arms race similar to those from Europe suffered greatly in the past. The Minister of State is saying that the Government has no position and does not want to pre-empt the debate. However, has Ireland already pre-empted this debate by assenting in October to the European Defence Agency, EDA, allocating €1.4 million to a pilot project in order to underline and prepare for the eventual project of increasing spending on research and pooling an initial €5 billion - up to €25 billion and maybe beyond that afterwards - in EU defence spending, as proposed by the EU and outside forces such as the US Presidency.

Eamon Ryan (Dublin Bay South, Green Party)
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The Minister of State said that he would not answer my question on whether the Government will support the proposal that the EIB might fund armaments and defence spending in advance of the meeting. What is the point of us being here if we cannot get some sense of the Government's position in advance of a European Council meeting? As I understand it, we are encouraged to have an understanding of our own position in advance of a decision of the European Council. It is not a difficult question, a sensitive question or a question of military secrecy. Can the Minister of State indicate whether the Government has a view on whether the EIB should be lending for armaments and defence spending? If he will not tell me, will he tell me why he will not tell me or will he explain the position? His refusal to answer the question because the meeting is coming up next week is something with which I fundamentally disagree. That is not what this House is for or how we should approach EU Council meetings. It is not a secret. I wish to know in advance what is the Government's position on this issue.

Paul Kehoe (Wexford, Fine Gael)
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There is huge potential in this proposal for Ireland. We must give that fact serious consideration. It is about pooling resources. I have said this in the House in the past. We must consider all of the proposals very carefully over the coming period, especially at Head of State level. That is where the Commission's proposals will really be considered.

The action plan will be formally sent to the European Parliament, the EU Council, the Committee of the Regions and the Economic and Social Committee for formal responses. I do not want to pre-empt anything, but I wish to say that we have to take these proposals extremely seriously and consider them. There is huge potential for Ireland. For a small country, given the amount we spend on defence, the proposals that the Commission has set out could get us more bang for our buck.

Eamon Ryan (Dublin Bay South, Green Party)
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Are we in favour of the EIB funding armaments?

Pat Gallagher (Donegal, Fianna Fail)
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We move on now to-----

Eamon Ryan (Dublin Bay South, Green Party)
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On a point of order, are we precluded from asking questions the Government's position before an upcoming EU Council meeting? What is preventing us receiving an answer to that question?

Pat Gallagher (Donegal, Fianna Fail)
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I ask the Minister of State to reply.

Paul Kehoe (Wexford, Fine Gael)
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That will be discussed at the upcoming EU Council meeting.

Eamon Ryan (Dublin Bay South, Green Party)
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I know. What is our position?

Paul Kehoe (Wexford, Fine Gael)
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I am not going to get into an argument. This is a proposal that has been sent. There is a huge amount of negotiation yet to be done in respect of it. We must give serious consideration to these proposals. There are huge benefits in this for Ireland.

Eamon Ryan (Dublin Bay South, Green Party)
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So we are in favour of the EIB lending in respect of armaments.