Dáil debates

Wednesday, 6 May 2020

European Council Meeting: Statements


12:05 pm

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
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On Thursday, 23 April, I joined other members of the European Council by video conference to discuss the coronavirus emergency and to chart a path towards economic and social recovery. This is the fourth such meeting, with previous meetings having taken place on 10, 17 and 26 March. I welcome the opportunity to provide an account of these meetings to the Dáil and to exchange views and ideas with Members.

Sadly, when this emergency started, the level of co-ordination across the European Union was poor. Member states did their own thing, very often because they were responding to a pandemic that was happening at a different pace in different countries, and, of course, as we all know, public health is a national, not a European, competence. At its best, the European Union stands for freedom, peace and solidarity and a belief that we can achieve something greater by acting together as a continent. Europe showed what these values meant recently during the first phase of the Brexit negotiations and now must do so again during this pandemic. We must have a co-ordinated response based on solidarity and demonstrate that the European ideal shines brightest when things are at their darkest.

In our meetings, the European Council has focused on five strategic areas of work where we believe co-operation is essential: first, limiting the spread of the virus; second, ensuring the supply of medicines, equipment and goods; third, supporting research; fourth, alleviating the socio-economic consequences for our people; and fifth, co-operating to bring citizens home from other countries. At our meeting of 23 April, we welcomed, in particular, the joint European roadmap towards the lifting of Covid-19 containment measures, which was published by the Commission on 15 April. It sets out a principles-based and science-led approach to reopening our societies and economies. This was widely welcomed and aligns with the approach we have taken as a Government to date.

Across Europe, our first responsibility - and our highest responsibility - has been to protect the lives and health of our citizens. We see this in the Commission's work on a shared procurement framework for personal protective equipment, PPE, and other medical supplies, EU research funding for the development of effective diagnostics and therapeutics, as well as a co-ordinated approach to working towards an effective vaccine for SARS-CoV-2. I welcome that the European Commission is building a strategic stockpile of medical equipment from which member states will be able to draw in the future and, indeed, in the near present. In fact, batches of FFP2 protective masks were distributed from this stock in recent days to Spain, Italy and Croatia.

There is more to do and we need to consider how to make the European Union more resilient and more responsive as we chart our way through and beyond this crisis. At our first meeting, we agreed to co-ordinate the repatriation of our citizens stranded across the globe as a result of the pandemic.

To date, repatriation efforts have brought more than 500,000 EU citizens back to their home countries. These include people repatriated to Ireland on special flights we chartered from Peru and India, on which citizens of 17 other countries also travelled. We have availed of the reverse from other countries.

On 17 March, we agreed that we would do whatever it takes to meet the current challenges, to restore confidence and to support a rapid recovery. We invited the Eurogroup of EU finance Ministers to scrutinise economic and financial developments and adopt a co-ordinated policy approach. The president of the European Central Bank, Madame Christine Lagarde, has participated in each of these meetings and she strongly supported our position that we need to provide monetary flexibilities to protect the European economy, at least in the initial stages of this economic crisis. The crisis has had deep and sharp economic and social impacts of which everyone in the House will be well aware. We have already seen the stresses and strains across all countries of the European Union and some more than others have been particularly affected.

At the meeting on 26 March, we discussed how we can best respond to this crisis collectively. Together, we must deal with the immediate issues arising and drive our recovery into the medium and longer term and ensure that it is sustainable. Prior to that meeting, I joined eight of my colleagues in advancing an approach that would have led to the mutualisation of debt, known in shorthand as corona bonds. The idea was to take a shared approach to managing debt arising solely from this crisis. This could be spending directed towards our health services or wider spending that governments have to undertake to protect their welfare states and refloat their economies. Such an approach would have required a legal underpinning not currently provided for in the European treaties and I accept that it would have taken a long time to agree this, even longer if it had to be approved in all member states and longer still if some, including Ireland, required referendums. However, it was still worth exploring. In the absence of unanimous support for this approach, we agreed that alternative solutions for a recovery fund should be developed.

I am supportive of the broad suite of measures taken at EU level. These include a temporary relaxation of the state aid rules under which Ireland has two aid packages, totalling €400 million and approved by the Commission, to assist our most affected companies. However, we need to ensure that member states do not use state aid to give an unfair advantage to companies based in member states with which they competed. This will be monitored closely. We have also invoked the escape clause in the Stability and Growth Pact in order to give member states additional flexibility to spend and borrow more in response to this crisis. We all appreciate that this cannot go on forever but it is appropriate that we do so at this particular point in the cycle. The European Central Bank has also played an important role in ensuring stability in the midst of this extraordinary crisis, including through its €750 billion pandemic emergency purchase programme. Capital rules for banks have also been eased to ensure that they can lend into the real economy, providing liquidity to businesses under pressure.

At the meeting on 23 April, we endorsed an economic package agreed by the Eurogroup worth up to €500 billion, and we asked that it be operational in the first week in June. The package contains three elements: a €100 billion EU SURE instrument, which will provide financial assistance in the form of loans granted on favourable terms to cover initiatives such as short-term work schemes and similar measures for the self-employed - this would include, for example, our temporary wage subsidy scheme; a €200 billion EIB Covid-19 guarantee fund for crisis lending to SMEs, mid-cap businesses and corporates, underpinned by €25 billion in member state guarantees; and a €240 billion ESM-operated pandemic crisis support instrument to provide a backstop for member states to make available sovereign funding of up to 2% of GDP for direct and indirect health care expenditures. It should be noted that these are all loans and guarantees and not grants, and borrowed money must be repaid. Taken together, these measures represent an EU fiscal response of over €500 billion - an historic level of deployment of resources to respond to an emergency that is unprecedented. This is a much greater and more appropriate response from the European Union than during the financial crisis ten or 12 years ago, when it acted in a way that was too little and too late.

Looking beyond the immediate crisis, we agreed the need to put in place a recovery fund to rebuild our economies, reopen our businesses and get our citizens back to work. We also welcomed the joint roadmap for recovery and asked the Presidents of the European Commission and Council to bring it forward. It also sets out a framework for collective action towards recovery, including a fully functioning Single Market, an unparalleled investment effort and a commitment to the EU playing its part in driving a global recovery.

As a necessary next step to this work, we welcome the European Commission's proposal that it undertake a sector-by-sector analysis of the economic impact of the crisis to identify and target supports necessary for recovery in those particular sectors. We also agreed that climate action and the digital economy should be critical components of this recovery plan. This crisis has dealt a terrible shock to our economies but also creates an opportunity to make sure that the European-wide recovery is climate-proofed and technology-driven. I believe the EU budget, the Multiannual Financial Framework, is the most obvious vehicle for doing this, so we have asked the Commission to look again at the MFF proposal and to consider how it and the recovery fund should be linked.

As is well known, there are strongly held different views around the table on how this should be financed. Some believe there should be transfers from other countries to those countries most affected in the form of grants - generally speaking, a transfer from north to south. Others expressed the view that loans were the only acceptable option to their citizens and also the legal order of their nations and their constitutions. I articulated the view that both could play a part and that the right balance between loans and grants is what we should aim for. I also argued that I could not accept any approach that deployed the MFF to the detriment of proper funding of the Common Agricultural Policy, CAP. Farming, agribusiness and the food sector were already facing great challenges and have been deeply affected by this crisis. Successful and well-functioning programmes, such as CAP, cohesion and Horizon, will help to drive our recovery and, therefore, should be funded properly for the next seven years. At this time of crisis, we see the strategic importance of a strong agrifood sector providing European citizens with food security and affordable food. CAP is needed now, more than ever, perhaps as much as it is was needed when it was first invented.

During this emergency, we have seen huge stresses on the Single Market as some internal borders closed to people, goods and services, albeit temporarily. As was predictable, countries that closed their borders and introduced export bans had to reverse them within weeks, when they learned very quickly that the benefits were less than the costs. I believe a fully functioning Single Market and free trade beyond our borders will be necessary as we recover from the recession induced by Covid-19. In the wrap-up statement, the Minister of State, Deputy McEntee, will discuss the package of measures being taken at EU level to support partner countries globally. As part of the Union's global effort, more than €3.3 billion of EU financial support has been mobilised for the western Balkans for Covid-19 and the post-pandemic recovery. This is our neighbourhood and it is the right thing that we should help them. Later this afternoon, I will participate in a western Balkans summit with EU leaders and Heads of Government from the western Balkan states. This will also be done by video conference, so I apologise that I have to leave this session early to take part in that.

On Saturday, we mark Europe Day. I believe this date should serve as a reminder of what we have achieved together. The EU is held together by its values - respect for democracy, the rule of law, individual freedom, equality before the law, our unique model which is the social market economy and the four freedoms. It should also remind us that so many of the problems and challenges we face do not recognise borders drawn my mankind. Whether it is health emergencies like pandemics, environmental emergencies like climate change, security threats like international terrorism or global economic movements, the pooling of resources, the creation of safety nets and the adoption of collective measures are necessary to drive our recovery.

This is particularly important for small countries such as Ireland, with a population of only 5 million. Our best hope for the future lies in working together, being at that top table in the European Union and making sure we are at the heart of the common European home we helped to build. I welcome the views and thoughts of Members today.

12:20 pm

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
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Gabhaim buíochas leis an gCeann Comhairle. Ní neart go cur le chéile. Is é an bhrí atá leis an seanfhocal seo an bhrí atá i gcroílár an Aontais Eorpaigh. Tá géarghá ann le comhoibriú den scoth idir bhaill an Aontais a fheiceáil chun déileáil leis an gcoróinvíreas agus leis an ngéarchéim gheilleagair a bhaineann leis. Is léir go bhfuilimid i bhfad níos láidre ag obair le chéile ach is léir freisin go bhfuil i bhfad níos mó le déanamh ag an Aontas Eorpach, go háirithe maidir leis an dúshlán ollmhór atá amach romhainn i dtaobh cúrsaí eacnamaíocha.

Maidir leis an gcoróinvíreas, measaim go raibh an Coimisiún mall i dtosach ach diaidh ar ndiaidh tá feabhas tagtha ar an scéal. The events of the past two and a half months have once again highlighted the great strengths and serious weaknesses of the European Union as currently constructed. The failure of leaders participating in the European Council summits to agree a radical response to a unique emergency should be of grave concern to everyone. Measures which have been announced are welcome and they will help, but they go nowhere near providing the scale and range of actions Europe needs if it is to recover quickly.

For a few years, Fianna Fáil has been pushing for Ireland to take a more active role not just in defending Europe but in helping to develop Europe. We have called for this country and its partners to break free of the defensive posture adopted in response to the anti-European Union rhetoric of the right and left. A debate which looks at every issue as a zero-sum game defined by who gets our money has been highly destructive in the past and it will continue to be so.

Collectively, we have asked the European Union to take a lead in promoting innovation, guaranteeing food security, promoting regional development, securing our energy supplies, tackling long-term unemployment, ensuring we address the climate emergency, stabilising and reforming the financial system and many other tasks. Now we look to it to limit the financial damage of a severe pandemic and help countries to recover from a profound economic shock. The simple fact is the European Union has been denied the resources and powers it needs to deliver the agenda we have set for it, with a budget limited to a combined national income of 1%, a range of measures designed to limit fiscal transfers, a ban on raising collectively assured debt and a requirement that all emergency funding be taken from existing programmes.

On top of this, the European Central Bank, the one institution willing to act with true urgency and ambition, is under assault as a result of a remarkable judgment from the German constitutional court. It should be of grave concern that the court believes the European Central Bank's measures are disproportionate to the economic and fiscal policy effects. It is hard to conceive of any circumstance more serious than the one we face today and the idea that the European Central Bank's response could be considered to be disproportionate is almost bizarre. While this is not something receiving a lot of attention today, it is just as serious as when there was an attempt to block the ECB action that saved the euro from disintegration during the financial crisis.

While we welcome the measures agreed at the summit and Ireland's late conversion to supporting collective borrowing, we reject the idea that anywhere near enough has been agreed or that what has been agreed has been delivered. Other than the outbreak of a war there has never before been such a dramatic and rapid public health and economic shock. Just like every other country in Europe, Ireland does not yet really know the scale of the recovery challenge we face. If the member states of the Union continue to block measures to develop new direct funding mechanisms, then the Union's contribution will continue to be economically marginal. If ever there was a time to reflect on the importance of co-operation between states and strong shared institutions, this is it.

Without the international public organisations, the world would be in a much worse position today.

While there should be a comprehensive and independent inquiry into the early stages of the pandemic, an inquiry focused on what can be done better next time, the World Health Organization has proven its value and we strongly support the efforts to secure its funding. We also believe we should acknowledge the work of the European Centre for Disease Prevention and Control. It is not a high-profile European Union body but it does essential work in sharing information and co-ordinating responses among member states. It is also important to acknowledge the work of scientists working in our universities and institutes. In addition to being central to much of the response here, many teams are working on different parts of the challenges of developing both treatments and vaccines. It is a reminder to us all of the importance of having a wide research base and that not all of this can or should be linked to commercial objectives. The societal and public health benefits which come from having a broad range of scientific expertise here are simply undeniable.

A development of deep concern in the past two months has been the way in which some governments appear to see the pandemic as an opportunity to entrench themselves. The effective suspension of parliament in Hungary is clearly a major breach of the core democratic principles to which that country signed up when seeking membership of the European Union. Every country has had to implement emergency measures to respond to the pandemic but the powers grabbed by the Orbán Government go well beyond anything seen elsewhere. In many countries, there have been questions about whether the media has been challenging enough concerning government action, but only in Hungary has the Government taken major new censorship powers unto itself. One decree in recent weeks has given the Government of Hungary the power to effectively confiscate money from local authorities without appeal. So far, this power has only been used to take money from districts controlled by the Opposition and the combination of suspending parliamentary oversight and controlling the media means that there has been no means of challenging this. In this context, the sense that Viktor Orbán can act with impunity and the European Council will do nothing is deeply corrosive of the foundations of the Union. One of the highest net recipients of European Union support, whose economy is profoundly based on free access to the Single Market, is challenging the basic idea that a state must be a free democracy with genuine checks on power if it is to be a member of the Union. To simply ignore this and hope it will sort itself out is not good enough.

Last week the European Parliament raised its concerns about the possible watering down of a Commission report on the spreading of pandemic disinformation. It is not yet clear what happened but there should be no doubt about core principles. The spreading of disinformation by states outside the European Union has reached dramatic proportions in the past decade. The efforts to support the far left and far right have been a core part of a strategy to undermine democracy and the Union itself. In recent months, there has been widespread evidence of conspiracy theories and false claims being created and spread relating to the origins and impact of the virus. Member states rely on the institutions of the Union to monitor and report honestly about this issue. Under no circumstances should the honest assessment of relevant experts be watered down or censored. At a minimum, there should be a comprehensive explanation of what happened in this circumstance and any removed material should be published. In terms of specific measures taken during the summer, what we need is to move as quickly as possible to implementation. The delay which has characterised funding initiatives in recent years cannot continue. Equally, we support the call of President Macron and the French Minister for Finance to return to discussing more ambitious actions.

Obviously, Brexit has not gone away. It appears likely that there will be major decisions to be taken in the coming weeks and months. This will be discussed at length tomorrow so I will leave most of Fianna Fáil's comments to that session. However, it is important to state today that the threat of a chaotic Brexit remains and the need for us to prepare for all eventualities is more significant than ever.

The extraordinary position of London that no European Union office will be agreed for Belfast appears like a demonstration of bad faith concerning the operationalising of what has been agreed relating to Northern Ireland. It may be some form of negotiating tactic, the logic of which remains hidden. There is, however, nothing positive about London citing a concern with community divisions in Northern Ireland, which had not existed before. No one in Northern Ireland appears to object to the idea of a European Union office in Belfast. The London Government's position is of concern and is, in my view, potentially highly divisive.

12:30 pm

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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The Covid-19 emergency has presented the people of Europe with an unprecedented crisis and challenge. The virus has attacked our societies, ravaged our economies and tested our communities in previously unimaginable ways. Despite the painful and cruel nature of this pandemic the people of Europe have rallied and demonstrated, as the Taoiseach put it, Europe at its best. There is solidarity, compassion and social justice. We have endured and we will endure, not because of the worst of Europe, which is corporate greed, an aggressive, doctrinaire neo-liberal approach, vested interests, privatisation, and the running down of social protections and workers' rights. Europe's people will thrive despite all of that.

It is incredible that a huge economic system and political systems globally have been brought to their knees by this deadly virus, yet the people prevail. It is they who most effectively articulate what Europe is and what the European Union should be. We see Germans singing "Bella Ciao", that great anthem of the Italian resistance, in solidarity with their beleaguered Italian friends. We see Spaniards clapping their health workers on their way into work every night. In households here, we see people placing candles in their windows to honour all who have tragically lost their loved ones. That is the real measure and value of what the European project should be.

Workers and families in the European Union also share a common hope for the future that the recovery, which will surely follow, must be fair and that progress will be built as we emerge from this crisis with people, citizens and solidarity front and centre. In the aftermath of this pandemic, we cannot perpetuate an economic system of winners and losers. We cannot have a scenario where some profit from the pandemic while others are saddled with crushing debts from mortgages, rents and utility bills. Ordinary people must come first in this recovery. This also means giving back to low-paid and front-line workers who managed to carry us all through this emergency. Caithfidh gnáthdhaoine a bheith chun tosaigh san am seo. Ní féidir leis na hoibrithe riachtanacha inniu a bheith ina n-oibrithe dearmadta amárach. The essential workers of today cannot become the forgotten workers of tomorrow. Much has been said in this regard about those who work in retail. Debenhams workers are outside the gate today. These are workers whose employer availed of this public health emergency to cast them aside and dispense with their services. The truth is that the Government did little or nothing to secure those jobs. It is astonishing. Bank of Ireland is a minority shareholder in Debenhams, yet the Government has sat on its hands. It looks like Debenhams will get off scot-free and the workers are left high and dry. Perhaps we should start there, with that set of workers, to demonstrate what the new recovery and new economic and social order might be.

Ten years ago, the European Union was faced with a different crisis, a seismic economic recession as a result of the banking collapse. At that time, it was faced with a real choice between the imposition of austerity that would punish workers, families and communities for the reckless gambling of bankers and financial speculators and building a recovery through investment and stimulus that would protect ordinary people and really kick-start economies.

The EU at the time chose austerity, which Fianna Fáil and Fine Gael in government implemented with great relish. The people of this State paid a very heavy price in the form of devastating cuts to services, soaring unemployment and staggering levels of emigration. The consequences of this austerity were severe hardship, particularly for low and middle-income workers, while those at the top were insulated. Indeed, many of them thrived in this savage environment and that cannot happen again. There can be no return to austerity in the wake of this emergency. To that end, the Taoiseach noted that the fiscal rules within the EU are currently suspended but he will also know, as outlined in black and white in the spring stability programme update, that this is only a temporary state of affairs and the excessive deficit rules will apply again in the future. The Irish people are all too aware of what austerity looks like and how it feels from the time of the previous crisis. The European Commission at that time and the European system was no great friend to Ireland or our people.

There are huge concerns now among workers and families that we are looking at déjà vu, a re-run of that scenario. I listened to the Minister for Finance this morning and I am very concerned. He suggested that financial supports for hundreds of thousands of workers will come to an end in June. That is an intolerable and unacceptable proposition and I hope the Taoiseach will confirm for the House that it will not happen.

The better way to manage this crisis is to take those decisions that serve the interests of workers and families. This is not pie in the sky, before anyone dismisses it. This is about having the courage, ambition and political imagination to make better choices. It is also about doing the right thing. No longer can our society be held back by the naysayers who say a fair recovery and a more equal society are not possible. Many of the things that those in Fine Gael and Fianna Fáil told us were impossible in the course of the recent general election have been done in a few short weeks. Voilà- all of it could be done, including a rent freeze, the thing they railed against. The people do not want a repeat of the lost decade and will not tolerate it. We now need a new vision for our society and our economy as we keep our place as proud Europeans, proud global citizens and people who care for ourselves, our families and each other.

12:35 pm

Rose Conway-Walsh (Mayo, Sinn Fein)
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As we work our way out of the turmoil of this pandemic, the entire EU project faces an extraordinary test. There are opportunities, however, not only to address the democratic deficit that contributed to Brexit but also to reshape many aspects of our society and of the whole of our island. The EU has a major and crucial role to play in this transition, and the EU financial support package, the suspension of the Stability and Growth Pact, the temporary relaxing of state aid rules, the Common Agricultural Policy, CAP, transition regulation, and the next CAP programmes have to be used to invigorate the regions. Now is the time to place balanced regional development and rural Ireland firmly front and centre of EU and Government policy by identifying and implementing rural solutions to national problems.

All too often we in rural Ireland hear about the millions and billions of euro that are made available, but it is always out of our reach because of too much bureaucracy and too many unidentified beneficiaries. To that end I have grave concerns about the high interest rates being charged by banks when, globally, interest rates are so low. It is unthinkable that the banks would again capitalise on the backs of ordinary people. During this pandemic, focus has been put on the fact that 40% of the population live in Dublin, while 44% work there.

Only a fool would consider this imbalance to be sustainable or safe. Investment policies driven by population numbers do not work. We can no longer miss out on the opportunities to deepen and widen the lengths between education and industry or to forgo opportunities for remote working and learning because we do not have equal access to broadband and telecommunications. We are losing out so much on human capital, denying children with autism, parents of children with autism and those living with disabilities the opportunities to develop and use their abilities and talents to their full potential.

The economic recovery must include the fast-tracking of critical physical telecommunications infrastructure as well as introducing fairness into our fishing and agriculture industries. We must ensure we proactively pursue all monetary opportunities as well as using the fiscal instruments available to direct industry and job creation. The long-promised strategic development zone at Knock Airport must be advanced as a matter of urgency and the airport itself must be enabled to reach its full potential as a catalyst for growth in the west. The EU Commission proposal to make 2021 the year of rail presents us with opportunities to bring the western rail corridor to fruition and to upgrade existing rail lines. We now have an opportunity to reconfigure our health services to provide equality of access to all of our citizens, no matter where we live. To squander this crisis would be a travesty. The crisis inevitably brings about change but progress is optional.

As this is my maiden speech, I sincerely thank the people of Mayo for placing their trust in me and in Sinn Féin. I assure them this seat belongs to them and I will use it wisely.

12:40 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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I congratulate the Deputy.

Roderic O'Gorman (Dublin West, Green Party)
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I thank the Taoiseach for outlining the key conclusions from April's European Council meeting. I welcome the European Council's discussion of the joint European roadmap towards the lifting of Covid-19 containment measures. I also welcome the endorsement by the European Council of the Eurogroup's agreement on safety nets for workers, businesses and sovereigns.

The maintenance of workers' incomes, either through wage subsidy schemes to keep jobs or through direct financial assistance, such as the pandemic payment in Ireland, is a key response responsibility of all governments. It is also important to note that the EU has recognised the scale of the crisis that the Covid-19 pandemic poses across the Union by recognising that the conditions for the use of the general escape clause of the EU's fiscal framework, where there is a severe economic downturn in the eurozone or across the Union as a whole, has been met. That step, combined with the novel use of the EU budget via the coronavirus response investment initiative and the actions of the European Central Bank to support liquidity and financing conditions, demonstrate the ability of the EU to react jointly and with a sense of solidarity. We regret, however, that we did not see that same sense of solidarity expressed by some member states, especially with respect to novel ways in which the EU could support member states to borrow as they emerge from the crisis.

I would like to refer in particular the joint roadmap for recovery that was presented at the European Council meeting. This is described as a comprehensive recovery plan and an unprecedented investment that will help the EU to relaunch and transform its economies. Central to this joint roadmap for recovery is the European green deal. Over the past two weeks in Ireland, there has been extensive discussion of how we can meet the target of cutting carbon emissions by at least an average of 7% per annum between now and 2030. A lot of the coverage is focused on the financial cost of the policies needed to achieve this. I would like to take this opportunity to discuss how at EU level the recovery from the economic shock created by the coronavirus is linked to the green European deal, how the policy changes we are implementing will be supported by EU-wide policy approaches, and in particular how major funding is being provided at EU level to finance these policies.

Under EU law currently, the Union is committed to a 40% cut in greenhouse gas emissions by 2030. However, as part of the EU's move to achieve the target set out in the Paris Agreement, it plans to increase its 2030 commitments to a cut of between 50% and 55%.

This change is being brought forward as part of a new EU climate law which the Commission has recently proposed. Once this law is passed, it will be binding on all EU member states, including Ireland. A reduction of at least an average of 7% per annum in Ireland will enable us to meet this target. It is important to remember that this target is not Ireland going alone. It is part of a collective EU response to the decision by all 27 member states, including Ireland, to sign up to the Paris Agreement and it will be legally binding on Ireland and all the member states within the year.

Obviously, setting a target of at least 7% average annual emissions reductions is not enough on its own. Success will only be achieved through a range of policy measures that deliver reductions in each part of the economy. As part of the European green deal, the EU will bring forward specific policies in 2020 and 2021 to support the achievement of its new emissions reduction targets. New CO2 emissions standards for vehicles, including vans and trucks, are currently being set. Later this year, there will be a funding call to support the development of public recharging and refuelling points as part of alternative fuel infrastructure. There will be a new strategy on offshore wind, something that will help support Ireland as we seek to develop this hugely underused resource which could deliver us 5 GW per year of clean and cheap energy by 2025. A new circular economy action plan will be developed. This will include a sustainable products initiative and a particular focus on resourcing sectors such as textiles, construction, electronics and plastics. Ireland and the EU can be at the forefront of designing products where waste is minimised.

Changes of this scale have a cost, but the EU is providing a huge amount of funding to enable these changes to be financed. Central to the European green deal is the European green deal investment plan, which proposes to mobilise at least €1 trillion in sustainable investment over the next decade. Some €500 billion is to be provided by the EU budget for climate and environmental spending between 2021 and 2030. This will trigger additional national co-financing of €114 billion over this timeframe on climate and environmental projects. The InvestEU fund will leverage approximately €280 billion for climate and environmentally friendly related investments by providing an EU budget guarantee to reduce risk. The innovation and modernisation funds, which are financed through the revenues from the auctioning of carbon allowances under the emissions trading scheme, will provide at least €25 billion for the EU transition towards climate neutrality. Beyond the EU budget, other EU funding bodies are changing their mandates to better reflect the need for climate action. The European Investment Bank has launched its new energy lending policy which aims to end financing for fossil fuel energy projects by the end of 2021. Its investment priorities are now shifting to clean energy innovation, energy efficiency projects and renewables.

One of the principles of the European green deal is that no person and no place is left behind. The Green Party has always advocated for the need for a just transition whereby the rights of workers and communities who are currently dependent on fossil fuel industries are provided for in the move to more sustainable energy production through investment, retraining and diversification of local economies. This is a major issue across the EU as communities in parts of Poland, Germany and France are deeply dependent on coal mining. In Ireland, the regions associated with peat cutting, particularly in the midlands, must be protected. To facilitate this, a just transition mechanism is being put in place. The aim of this funding mechanism is to promote and develop new skills among workers and to support the growth of businesses. It is expected that between the fund and member states' commitments, between €30 billion and €50 billion will be available. This fund will target fossil fuels, including peat, and greenhouse gas intensive industries.

The scale of the investment I have set out, €1 trillion over ten years, will not only help create jobs in Ireland but will also spur new industries. There will be a great benefit for those countries and regions that put in place the proposals that can seek EU funding, co-funding or support from the European Investment Bank. A number of European governments, particularly in the east, have taken the direction of opposing climate action and refusing to move their economies in a more sustainable direction. Those countries will lose out on the potential to get this massive investment.

Ireland must not do this. It must put in place the national policies that connect with these EU policies so we can benefit from the investment, develop new industries around renewables and create new jobs all over the country, particularly in those communities in transition.

Every action taken by any government across the planet for the foreseeable future will be coloured by the Covid-19 crisis. Earlier this week, a group of well-known economists, including Professors Joseph Stiglitz and Nicholas Stern, published a paper in which they examined whether the recovery packages being prepared to follow the Covid-19 crisis will be beneficial to climate policies I have spoken about or run contrary to them. Their research finds that recovery packages that seek synergies between climate and economic goals have better prospects for increasing national wealth and enhancing productive human, social, physical, intangible and natural capital. They also state that green fiscal recovery packages can act to decouple economic growth from greenhouse gas emissions and reduce existing welfare inequalities that will be exacerbated by the pandemic in the short term and by climate change in the long term.

As we hopefully begin to emerge from the worst of the coronavirus crisis, we can choose what kind of recovery this can be. What I hope to see, and what we will work for as a party, is a recovery that works for all, rooted in European solidarity, and that confronts the challenges we face. We are in a climate emergency. The costs of failing to meet the 7% target are catastrophic. That is the scientific consensus and it is on that basis that we should plan. It is also the clear direction of the EU. The European Council sees the European green deal as central to its joint roadmap for recovery. The policies I have outlined can help to create jobs and support a recovery from Covid-19 that is equitable and sustainable in every sense of the word.

12:50 pm

Duncan Smith (Dublin Fingal, Labour)
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Once again, the EU is faced with a major crisis. This crisis has the potential to make or break the Union. The test this time is whether the EU can demonstrate solidarity among its member states based on shared democratic values or just wants to be a marketplace. One of the reasons the UK was never fully integrated into the EU was it only wanted a single market and not a political community. The Labour Party's view, however, is that the EU can be successful only if it is built on solidarity and mutual assistance among its member states.

We welcome the EU's decision to use €540 billion from the ESM to assist member states without many of the onerous rules that usually come with its loans. We particularly welcome the recent action by the EU to host donations to developing countries to assist them in their response to the epidemic. The target of €7.5 billion, set on 4 May, was essentially reached within 24 hours. This was a testament to the surge of global solidarity brought about by the Covid-19 epidemic.

My main focus, however, is on the idea of a European recovery fund. My colleagues from the Party of European Socialists proposed a €1.5 trillion recovery fund to help all our countries to rebuild after this crisis. I am glad EU leaders recently agreed to create a new fund of at least €1 trillion euro, which is a great step forward, but a lot hinges on the model of financing used to underpin it and decisions on how it will operate. In short, we need a fund that distributes grants as well as loans and that targets more assistance to the worst-affected countries on the basis of solidarity, not their proportion of the EU's population. We also need the fund to be financed at EU level, not by piling unsustainable debt onto member states' already overstretched national debts.

The recovery fund proposal is important so I would like to speak about it in more detail. The first point is fairly self-evident. When countries and major employers are already overstretched, they cannot afford to take on too much additional debt. Many viable enterprises throughout Europe will only remain viable if they are given grant aid, not loans. Likewise, there are countries that will have the capacity to quickly get their public finances in order but only if they are given grants, not loans. The choice is between being pragmatic about what will work and being ideologically opposed to grants. Unfortunately, a number of governments across the EU are ideologically opposed to the idea of giving grants to other member states. The irony is that this ideological position will make the EU's recovery slower and more painful, just like after the 2008 banking crisis, when the same ideology dominated EU thinking. We must not make the same mistake twice. Other parts of the world came out of the 2008 crash faster because they were not prisoners of this ideology. Across Europe, people must not be asked to endure another set of austerity years. People will not tolerate more austerity. We have already seen the rise of Eurosceptic and far-right politics in response to these ruinous policies.

This time around the EU has to give grants in addition to loans if economic recovery is to be faster and more sustainable.

The second point is that the European recovery fund must be focused on the areas of greatest need regardless of geography. In normal times the EU carefully allocates funds based on the population size of member states and their contribution to the EU budget, but we are not living in normal times and those rules cannot apply. A European recovery fund needs to allocate money to where it is most needed to boost recovery and to rescue as many viable jobs as possible in the aftermath of this crisis.

It is also an opportunity to direct funds towards environmentally sustainable activity and to speed up the EU's transition to a low-carbon economy. Again, this is a choice between being pragmatic about what actions will help economic recovery versus being ideologically opposed to any kind of fiscal transfer. Unfortunately, a similar set of governments is blocking this idea because it fears a domestic political backlash if it is seen to use its own tax revenue to fund the recovery of other countries. However, the model for a European recovery of the Party of European Socialists took that concern into account. There is no need for member states to fund other member states directly as long as the EU borrows money at EU level and repays that money from its own resources. As such, there should be no objection to channelling money to where it is most needed, and that will benefit the whole of the EU in the long term. We will all be worse off if regions of Europe are left behind in the recovery; hence, the recovery fund must be targeted where it is most needed.

The third point about the recovery fund is that it should be raised at EU level and paid for at EU level. In this context I am pleased to see that the Government has backed the proposal for eurobonds to fund the recovery. The logic of raising debt at EU level to create the recovery fund is fairly straightforward. Many EU member states have relatively high public debts following the disaster of 2008. Some of us would find it difficult to borrow money to raise those debts further, even though in Ireland we are still fortunately able to borrow at very low rates. The EU exists as a separate international entity with the capacity to borrow, but it currently has no debt compared to the United States where debt is carried at both federal level as well as at state level. To use the analogy of bank accounts, many member states have already reached their overdraft limit on their personal accounts but we have a shared account with our partners with no overdraft at all. It makes much more sense to collectively use our shared account to finance the recovery fund rather than to individually pay more to extend our already large overdrafts. This is where some member states fear being asked to directly finance others, but that is not what is being proposed. If we borrow at EU level we should also repay the debt at EU level. Currently, the EU has modest revenue-raising capacity, mostly from custom duties and sugar levies, but these could be expanded, for example, with the proposal for a financial transaction tax at EU level. Also, the original proposal for a €1.5 trillion fund envisaged perpetual or very long-life bonds, which have a surprisingly low annual cost in comparison to the €1.5 trillion capital figure. It could be financed for about €5 billion in interest payments per annum and as a perpetual bond the capital could very well not come up for repayment. The EU has the capacity to service such a debt. Over time, inflation would erode the capital cost to a much lower level, which means that it could be paid off decades later just as some post-Second World War bonds have only recently been paid off.

I hope that the idea of a European recovery fund will be agreed sooner rather than later as the future of the EU depends on a successful economic and social recovery after Covid-19. I seek clarity from the Government about whether or not it supports a European recovery fund along the lines I have described. I would appreciate a detailed response on what the Government agrees with or disagrees with regarding any recovery fund.

Regarding bond buying by the European Central Bank, which is currently keeping national borrowing rates low and keeping inflation down, there has been a major challenge to the ECB's quantitative easing approach by the German constitutional court. It has made a ruling that will potentially halt participation by the German Bundesbank or the German Government in this policy, which would have major knock-on effects and could jeopardise the stability of national debts in numerous member states. All of this stems from a legal case taken by an independent group of business people and academics who are ideologically opposed to any burden sharing across EU member states and who oppose the €2.7 trillion programme. While this ruling excludes the €750 billion pandemic emergency purchase programme, there is now expected to be a further legal challenge to its legality. What is the Government's understanding of the German court decision and what actions are being taken to ensure that the ECB's bond-buying programme can continue, including the actions to ensure that the pandemic emergency programme is legally robust? What is the Government's understanding of how this ruling at national level challenges the authority of the European Court of Justice and the ECB?

Key to all of this is solidarity: solidarity among EU members and solidarity between the EU and the rest of the world. I believe Europe has a responsibility to be a leader not only in its own recovery but in the global recovery.

We need to stand strong in solidarity with those who need it within our own borders and throughout the world.

In mid-March, 52 doctors and nurses from Cuba arrived in the region of Lombardy in Italy on a day when Italy's death toll from Covid-19 reached 800. That was an incredible act of global solidarity. The EU must be seen to reciprocate and work to assist countries such as Cuba which are impeded by tightening US embargoes when accessing medical equipment that is much needed to combat the pandemic. We should use Covid-19 as an opportunity to break traditional enmities and hostilities. I support call of the UN Secretary General, António Guterres, for sanctions to be waived to the tackle the crisis. He said this was a time for solidarity, not exclusion. We are all bound by our common humanity and we all need to defeat this virus. The EU should be moral leaders on this.

1:10 pm

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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This is the second time in just over a decade that we face an economic crisis. This one is obviously very different because life and health are centre stage and the economic fallout is as a consequence of Covid-19. While I welcome the belated response to limit the spread, the investment in the development of medicines, and the research which is under way, and they are important, there is lesson to learned in particular from the late response in Italy and how that played out.

The response to the previous economic crisis meant that some countries were forced to cut back on spending on areas such as health, which made them less able to deal with this crisis. The response to this crisis cannot impact on member states' ability to mitigate predictable crises in public services or climate mitigation measures in the future - things that we know we have to respond to. There has to be an appreciation of the scale of the problem by all member states, and there also to be an appreciation that the response to that has to be large enough, that not all member states were impacted the same way, and that not all of them have the ability to respond equally. For example, we have a huge national debt imposed partly as a result of how the EU dealt with the previous crisis. We are not alone in this, however. Countries such as Italy simply cannot take on further debt. If they are required to do so, and I am hearing the loan and grant scenario, that will be catastrophic, not just for Italy but for the eurozone as a whole. We have very fresh memories of the last crash. It was not, as we were told, a Union of equals. It was dominated by intergovernmentalism, with Germany and France at the axis. They really called the shots. There are signs of the same kind of thinking - perhaps slightly less, which we should be very concerned about.

This crisis was not caused by individual member states. It must be viewed the same way as a natural disaster, with all member states impacted, some more so than others. There simply must be a common response, with European solidarity driving the solutions. We must recognise this is a once in 100 years occurrence, which must be a factor in how it is responded to. It cannot depend on member states taking on more debt. If it does, it will elongate the problem and it may well lead to a break-up of the European Union.

Last week in the Dáil, my colleague Deputy Shortall raised the issue of corona bonds, and in response the Taoiseach stated: "We expect the European Commission to come to us next week with proposals on how we can use the multi-annual financial framework, MFF, the seven-year budget for the EU, and borrowing perhaps by the Commission as a means to do something similar." This approach seems to be the one favoured by the northern European states. While it would mean that there was a larger fund available within an increased EU budget, it relies on private actors investing in EU countries.

The riskiest tranche of their investment would, however, be guaranteed by the Commission. The big problem with this approach is that it still means taking on extra debt.

We all agree that a major stimulus programme is needed for countries throughout Europe, including Ireland, if this crisis is to be temporary. The French proposal to establish a Covid-19 recovery fund financed through joint debt insurance has definite merits. It has a downside in that it would take several months to establish, and these are months that we simply do not have. It would also be resisted by countries like Germany, Netherlands and Austria. The more ambitious Spanish proposal of a €1.5 trillion recovery fund underpinned by perpetual bonds rather than loans or grants would mean avoiding adding to national debts. The Spanish proposal could obviously be modified but it allows for funds to be granted on the basis of the proportion of citizens impacted upon by the pandemic in each country. That would seem like a logical approach. As a review of the Spanish proposal in the Financial Timesput it, the plan is, on its merits, the best of the many ideas that have surfaced. Above all it takes seriously the scale of the challenge. It involves real resources, unlike the EU's usual financial conjuring tricks of leveraging private finance. At some 10% of the EU's collective annual national income, its size is similar to the likely hit to the bloc's growth and the likely worsening of public sector deficits. Anything less than something on this scale would be an inadequate financial response to the Covid-19 recession. A Project Syndicatearticle highlights the advantage of perpetual bonds as follows: "... because perpetual bonds never have to be repaid, they would impose a surprisingly light fiscal burden on the EU, despite the considerable financial firepower they would mobilize." The article goes on to state:

The disruption caused by the pandemic should be temporary, but only if Europe's leaders take the extraordinary measures needed to avoid long-term damage to the EU. That is why the EU Recovery Fund is so desperately needed. Financing it with perpetual bonds is the easiest, fastest, and least costly way to establish it.

If the EU were to take on Spain's proposal, a €1.5 trillion bond with an annual coupon of 0.5%, it would cost €7.5 billion across the eurozone. The EU Commissioner with responsibility for a green deal is Frans Timmermans. He offered his view of the Spanish proposal. He is an important player in all of this because there will need to be major investment in the green deal. He stated that the figure of €1.5 trillion has already been mentioned by the European Commission. That number does not seem far from the scale of investment that would be necessary. I am of the view that the proposal of the Spanish Government has a double merit. On one hand, it recognises the magnitude of the challenge, something not everyone accepts. I am concerned about the lack of acceptance of the scale of the problem throughout the eurozone. Mr. Timmermans also referred to how the Spanish plan represents a proposal of solidarity at European level.

Is the Spanish proposal on or off the table? Is it receiving serious consideration? What happened at European level on the last occasion really set the scene for the subsequent decade. It was a decade of austerity, a time when we needed to invest here in housing, sustainable forms of transport, retrofitting and modernisation of our infrastructure. In our case, such investment would have future-proofed us from other problems. Like other member states, our ability to invest was inhibited.

Europe will not get a second chance. This is really make or break. If Italy does not survive this, for example, there will be catastrophic consequences for the European Union. This really is a time for Marshall plan thinking and for that kind of solidarity. Can the Taoiseach let us know whether he favours a relaxation or suspension of the fiscal rules into the future so as long-term investment can continue?

The general escape clause is temporary. It is very difficult to conceptualise how it would work on the other side of this, particularly if very large debt has to be taken on. The Taoiseach might address the approach. Is the approach he outlined earlier of the mixture of grants and loans really where it is fixed at this stage? Is there room? What are we doing to try to create space with other countries to try to look for a different approach?

1:20 pm

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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There are very alarming signs that both the European Union and the Irish Government are utterly failing to learn the obvious lessons of the current public health emergency and are planning to revert to the failed austerity policies that did such damage in the aftermath of the financial crash of 2008 and to impose the cost and burden of this emergency once again on working people and the key public services on which we depend more than ever. The fact that the European Union is opting for loans with conditions attached to them immediately sets the alarm bells of austerity ringing. They have learned nothing. Such loans and conditions crippled this country, imposed incredible suffering and hardship on people and were utterly counterproductive the last time around, but we have the signs that they are planning to do it all over again.

The Minister, Deputy Donohoe, has warned of a so-called tapering of Covid payments, that is, cuts to these payments, when in fact the Government was forced into acknowledging that nobody could be expected to live on less than €350 per week. Now, however, we are talking about cutting that payment and pushing into poverty people who are in no way responsible for the fact that they have lost jobs and income. We are hiring the nurses we so desperately need for the health service on temporary agency contracts - hire-'em-and-fire-'em contracts - whereby they have no rights whatsoever. As I discovered from speaking to Phil Ní Sheaghdha on the phone the other day, we have still not paid most of the nurses the pay award they won as a result of the industrial action they took last year. In the majority of hospitals the nurses who are protecting us at the moment have not got their pay awards. It is disgraceful. There is the failure to intervene to support the Debenhams workers outside, who are being ditched in the most cynical way by a private company still making profits in the North, still operating online services in this country and still operating in the UK which has clearly used the Covid crisis as an opportunity to ditch its workers. I was talking to the workers outside. They have been emailing Ministers, who are saying: "Nothing to do with us. There is nothing we can do." That is a very worrying sign for the many workers who may face similar job losses as a result of this crisis. These are bad signs for the future.

It seems to me that the absolutely inescapable lesson of the current public health emergency and the absolutely indisputable conclusion one can draw is that when one is faced with a major emergency and challenge to society, one cannot let austerity and the market dictate the response. We learned, and the Government learned, that it had to be the State that marshalled all the resources necessary to respond and to take over private healthcare capacity to respond to a public health emergency. Why, then, would the Government want to revert to a two-tier health system? Why would it want to employ nurses on temporary contracts through a private agency and then be able to fire them after the crisis? It makes no sense whatsoever. If that is true of a health emergency, it is true of a climate emergency, it is true of a housing emergency and it is true of the need to prevent mass unemployment, which we could face in the aftermath of this crisis.

None of that will be necessary if the State willingly intervenes and marshals the resources that exist in our society. We have discovered during this crisis that wealth is not paper money. Wealth lies in the factories that produce ventilators, in the hospitals, in teachers, essential workers and retail workers. They are the ones who have to be protected and resourced in order that we learn the lessons that this crisis has taught. Those truths are staring us in the face and yet the Government and the EU seem intent on reverting to the mistakes of the past.

I urge the Government and the EU to learn those lessons. We do not have to face austerity and mass unemployment if we take the available wealth and resources and put them into producing a single-tier, properly-resourced health service, resolving the housing crisis, providing for smaller class sizes in schools and redeploying workers who have lost their jobs into the areas in which we need them, such as education, healthcare and public services. We do not need to repeat the mistakes of the past.

1:25 pm

Photo of Mick BarryMick Barry (Cork North Central, Solidarity)
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Last week, the International Labour Organization stated that 50% of the global workforce are in immediate danger of having their living standards destroyed by the coronavirus. "Destroyed" was its word, not mine. In some ways, that statement is only half correct because to be fully correct, it would state that those people's living standards will be destroyed by the coronavirus in the framework of market economics.

Ryanair is talking about making 3,000 redundancies, 20% wage cuts and closing bases throughout Europe. The company says that it cannot afford the cost of the coronavirus crisis to it, effectively in the region of €300 million. Ryanair made profits of €1 billion last year alone. It could absorb the hit it is taking but it is choosing not to do so and is placing the burden of the crisis on the backs of the people who work for it.

The European economy is facing a contraction of between 7% and 20%. Some 60 million jobs are likely to be affected and unemployment may double. For example, Spain lost 1 million jobs in three weeks. Clearly, without massive intervention on the part of states in order to save jobs, we face an unemployment disaster. There have been examples of state intervention in recent weeks. In France, a €9 billion package for Air France and KLM was announced. Germany announced a €9 billion package for Lufthansa.

I raise an issue about the retail industry in this State. Workers from Debenhams were protesting outside the Dáil earlier today in a disciplined and socially-distanced manner. Standing behind them are hundreds of thousands of retail workers whose jobs are on the line. That is not an exaggeration. Retail Ireland estimates that 110,000 jobs are at stake. Debenhams sets the benchmark; it is a test case. What are the parties that are negotiating a programme for Government going to do about it? There are 2,000 jobs involved. Debenhams has a profitable online business and at least four of its shops, more than one third of the outlets it has in the State, are clearly profitable. There is the possibility of rent cuts from landlords. I make the following point to the parties that are negotiating a programme for Government. It will cost the State more to let those jobs to go by the board, in terms of what is lost in tax revenues and paid out in social welfare payments, than it would to intervene and save them. Is the Taoiseach going to stand idly by while a profitable Debenhams store on his doorstep in Blanchardstown is allowed to close? Is the leader of Fianna Fáil going to stand idly by and watch a profitable Debenhams store close in the main street of his city, Cork, and allow another profitable Debenhams shop close within the heart of his constituency at Mahon Point shopping centre?

This is not a matter of providing State aid to Debenhams because the company has walked away. Instead, it is a case of a State takeover. People might ask questions about that and call it crazy talk. However, in a post-Covid-19 world, many things are going to be done that were not done in the past. This could be done. The company had ideas for diversification involving coffee shops, possibly wine bars, hairdressing services and so on, although they will not now be implemented.

Innovative policies to diversify could be implemented under State ownership. There could be a board in the company to which the Government could appoint representatives, people with economic and business experience etc., but the majority should not be civil servants. The majority at the heart of the management of such a company could be and should be the workers themselves. I refer to people who have worked in the company for ten, 15, 20 or more than 25 years, going back to the Roches Stores days. They know what the customers like and do not like. They have a strong idea of what would work and what would not work. They should be put at the heart of the management of the company and it should be run under the control and management of the workers.

The Taoiseach will be discussing the question of a jobs package as part of the programme for Government. That must examine and focus on the question of jobs in retail, where we are facing a jobs massacre. The test case for Deputy Martin, the Taoiseach, Deputy Varadkar, and Deputy Ryan is the Debenhams case. They have got to focus on that. What are they going to do on it now?

1:30 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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We go now to the Regional Group. I call Deputy Berry.

Cathal Berry (Kildare South, Independent)
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I thank the Taoiseach for his very informative back brief on the most recent European Council video conference on 23 April. I have four brief observations to make, both from my own perspective and also on behalf of my good colleagues in the Regional Group. First, I very much welcome the endorsement by the European Council of the Eurogroup's recommendation to provide an emergency financial package to assist the European states and peoples most affected by this crisis. The fact that this fund is in excess of €0.5 trillion is very reassuring and is also a very positive development that it will be used to finance the three so-called safety nets - for workers, businesses and member states. Consequently, I believe this funding will have a significant impact, at least in the short term, once it is finally up and running.

I am also happy to note that this emergency funding is meant to be available from 1 June. That is very important as it is urgently needed to offset and mitigate the catastrophic socioeconomic consequences of the crisis and, therefore, it cannot come too soon. Mindful that the first week in June is less than four weeks away, I would be grateful if the Minister could indicate when wrapping up the debate whether we are likely to meet this ambitious target of 1 June as planned and if she could outline the mechanisms that are in place to draw down this funding. I would also like her to indicate if Ireland will avail of this funding and if there is any conditionality associated with it.

Second, while it is good to see that this emergency funding will shortly be in place to help us get over the acute phase of the crisis, I note with concern that there has yet to be an agreement on the larger and more longer-term recovery fund, which most likely will be linked to the EU budget, the so-called seven year multi-annual financial framework. It is vital that this recovery fund be proportionate in size to the scale of the challenge we face. I therefore welcome it being compared to the second Marshall Plan for Europe, designed to ward off potentially the worst recession in a century. I only hope that the reality matches the ambition of this proposal.

While its scale is important, so is its urgency. I share the Government's frustration that a deal has not yet been agreed or struck. I note that the four most recent European Council meetings have been held by video conference and have not been as successful as expected, with Ministers citing the format being as big a barrier to an agreement as the extent of the policy differences between the various Governments. Consequently, I respectfully suggest that Ireland should push for the next European Council meeting scheduled for 18 and 19 June to be held physically, in person, in Brussels, which could easily be done within social distancing guidelines, as we are doing here today. For all the advantages of video conferencing, no amount of it can substitute for or compete with an actual physical conference in person, particularly when the stakes are so high and the need for an agreement so pressing.

Third, I welcome the recent announcement of an additional €200 billion in funding available through the European Investment Bank in Luxembourg.

I welcome that the focus of this funding is on small and medium-sized businesses. I very much encourage any Irish companies to consider accessing such funding if required and would appreciate greater clarity on how to draw down this finance over the short to medium term.

Finally, I note with concern yesterday's landmark and explosive ruling by the German constitutional court that the European Central Bank may have strayed beyond its mandate in the past few years with its bond-buying quantitative easing, QE, programme. Perhaps even more important to this country than the fiscal supports being provided by the EU is the very accommodative monetary assistance provided by the ECB. It is what keeps our bond yields at historically low levels, thus saving us billions of euro annually in servicing our national debt. As the ECB has only three months to justify the proportionality of its bond-buying programme to the German court, I would be grateful if the Government would share its view on how it sees the matter progressing at a European level and what impact it will have on Ireland.

1:35 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Deputies Carol Nolan and Mattie McGrath are sharing time.

Photo of Carol NolanCarol Nolan (Laois-Offally, Independent)
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I welcome the opportunity to make some brief remarks on this issue. When this crisis first emerged, the response of the European Union at Commission and Parliament level could hardly have been described as ideal. Pleas for meaningful solidarity on the part of Italy, which was enduring horrendous suffering, were met with bureaucratic resistance and an absence of regulatory flexibility. Fortunately, the pace of the response has picked up somewhat since then, even if many sectors, especially agriculture, remain deeply concerned about its scale and effectiveness.

What I want to see is genuine and constructive engagement with our European partners. No nation is strong enough to weather this storm alone. European solidarity has to become more than a cliché that is trotted out from time to time. If it is to mean anything, it must deliver practical and timely supports. I note that the European Commission is co-ordinating a common European response and taking action to reinforce our public health sectors and mitigate the socio-economic impact in the European Union. This will require mobilising all means at the EU's disposal to help member states to co-ordinate their national responses.

I note the recent submission by the Irish Farmers Association which proposed that the Government and the Commission act swiftly to introduce emergency measures, including using the EU Common Market organisation regulation to support farmers with direct payments for price-related market losses. This will be one of the central concerns as we go forward into 2020 and 2021. The cashflow and liquidity crisis facing Irish farmers and the agrifood sector is absolutely enormous. Only last week I supported the call for a market disruption fund linked to some form of credit guarantee. At present, agricultural SMEs cannot access the credit guarantee scheme due to state aid rules. This needs to be reassessed and resolved urgently. If it means escalating or bringing forward basic payments, then let that happen very quickly because it is needed.

I welcome the European Commission's private storage aid scheme, which is something I have been calling for since early March. However, the EU's response in designating a fairly paltry €80 million to cover the costs of private storage right across the Union is not sufficient. Who signs off on these packages? Surely there must be a sense that to do so is counterproductive in that it allows for uncertainty and unpredictability to remain in the markets? That must be addressed.

In terms of the EU response to the midlands, I would like clarity on what is happening and is going to happen with the just transition strategy. I call on the Taoiseach to ensure that the Mulvey report is published without delay. The wider EU strategy aims to cut greenhouse gas emissions by at least 50% by 2030 and achieve climate neutrality by 2050.

This will require a socioeconomic transformation in regions like the midlands which has historically relied on fossil fuels and carbon intensive industries such as Bord na Móna. Peat extraction is being held hostage by An Bord Pleanála. Its decision to grant Bord na Móna leave to apply for substituted consent was only issued earlier today. I welcome this decision. I believe that common sense has prevailed on this occasion in An Bord Pleanála. Workers, communities and peat harvesting contractors were left in limbo, and that is unacceptable. We need to ensure that peat harvesting is not tied up in uncertainty, with all power in the hands of An Bord Pleanála. The latter needs to change.

We recognise that this is not the time for divisiveness within Europe but we also need to recognise the scale of the challenge and to be ambitious enough to take the steps to meet that challenge and ensure that all sectors are supported.

1:40 pm

Photo of Mattie McGrathMattie McGrath (Tipperary, Independent)
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I too thank the Taoiseach for his briefing following the recent European Council meeting which was held by way of video conference. I note the Taoiseach has left the Chamber but I am sure my remarks will be relayed to him. At the previous post-European Council meeting debate on Thursday, 5 March, to which I contributed, there were very serious issues emerging. We did not know then how devastating and serious the pandemic would be. At the time the Taoiseach stated in the House that he had set out Ireland's position on long-established, well-functioning and successful policies such as the Common Agricultural Policy, CAP, and had made clear that those policies need to continue to be funded properly. That could not be truer than it is today.

At the European Council meeting in February the Taoiseach clearly outlined - this is important - that Ireland was willing to contribute more to the budget over the next seven years. In the debate on 5 March, I pointed out that that could not be done. We now know that there is no possibility of Ireland doing that. This means that payments to Irish farmers and important regional and social development programmes such as INTERREG will be cut. This is obvious. We now know that despite the Taoiseach's efforts, on 5 March EU Council members rejected Ireland's position, leaving farmers and the agricultural community, agribusiness and related sectors with deep concerns regarding what the cuts to CAP funding would mean. It was reported after the February meeting that Chancellor Angela Merkel had said that the differences were "still too great to reach an agreement" and "we are going to have to return to the subject of the budget" during the discussions on the multi-annual financial framework, which is meant to be operational from next year. That was simply unacceptable at that stage and it is even more unacceptable now. There are lengthy delays on many issues.

I remember well the financial crisis during which Ireland went broke. I recall that on the evening of my late mother's funeral the Minister, the late Brian Lenihan, telephoned me as he was leaving Brussels. I also recall returning his call and asking him not to accept the deal because it was not a deal. Rather, it was horrible and horrific treatment of Ireland at the hands of the wealthier and stronger countries in Europe, which are the same countries that had shovelled and bulldozed money from their banks into our banks and contributed hugely to our financial crash. The deal was accepted. They threw us out and dangled us on a line. They did not care about Ireland. We were the good boys. We made penniless our families in a so-called bailout, which I described then as a clean out, which is what it was. It was daylight robbery that when we could get money from the IMF for less than 3% we were charged almost 5% for it at European level. At that time, they showed zero solidarity with a country on the periphery of Europe that had been exemplary Europeans. We still are trying to be exemplary Europeans, in my view too much so a lot of the time.

Perhaps the Minister of State, Deputy McEntee, could outline the possible impact of the decision of the German court in regard to the European Central Bank and the German Central Bank.

I wonder why they were not keeping an eye on it when they were shovelling money in here, and giving it to our banks to give it to our people and to anybody who wanted it, literally, and then forcing them to pay it back. A trauma has been visited on our society as a result of the banking crisis. We are now dealing with a far broader and deeper crisis, and we see the different efforts, with funding of over half a trillion euro. I note they are going to be loans or supports and there will not be any grant aid, and I note also that Covid-19 bonds were rejected. Therefore, I see the very same pattern developing among the stronger countries at the centre of Europe and I see the reasons the United Kingdom left the EU, namely, the lack of solidarity and, frankly, the bullying and intimidation of smaller nations. When our need is there, we are not getting the support.

I ask the Minister of State, Deputy McEntee, to redouble her efforts to assess the impact of that judgment. Why are Ms Merkel and the German community so much stronger and why do they wield so much power? When the group of eight, including Ireland, got together to discuss Covid-19 bonds, they got no support and it fell idly by. How serious does this have to be before the European project realises there has to be parity of esteem for smaller countries and there have to be meaningful supports for them?

1:45 pm

Photo of Thomas PringleThomas Pringle (Donegal, Independent)
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I wish to share time with Deputy Catherine Connolly.

Photo of Alan FarrellAlan Farrell (Dublin Fingal, Fine Gael)
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Is that agreed? Agreed.

Photo of Thomas PringleThomas Pringle (Donegal, Independent)
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There is a saying that one should never waste the opportunity provided by a crisis. It certainly seems that is what the European Union is going to do throughout this crisis. The Taoiseach said earlier that what we should see coming out of this is a fully functioning Single Market. I would love to know what he means by that and if he would explain it to the House because it is a very interesting statement. What I take it to mean, and what I take the judgment of the German constitutional court to mean, is that we will have to move to far-reaching European economic union, where, basically, this Parliament will be a county council and we will take our measures from Europe.

It is very interesting how the court judgment is being reported today across Europe. The Irish Timesrefers to "The welcome ruling on Tuesday by the German federal constitutional court that the European Central Bank’s (ECB) massive 2014 quantitative easing...". However, other European copy raises concerns and suggests it is actually undermining the European Union. I would like to know what Ireland's intention is and where we want to go. To take what the Taoiseach is saying, as well as what was said by Deputy Micheál Martin, the ultimate outcome of this will be that we resign ourselves to becoming a county council that accepts diktats on European measures. I, for one, do not think that is the way we should go. We should look to build a Europe of equals, which we are not, but this seems to be the underhand way it has happened within Fianna Fáil and Fine Gael, in the Dáil and in Ireland. It seems to be the case that we will use this crisis to build up momentum and we will get treaty change down the road. Treaty change is ultimately what will have to come.

One commentator on the Politico website states:

Some worry that the ruling effectively neuters the ECB, blunting the famous declaration made by then-president Mario Draghi in 2012 to do “whatever it takes” to save the euro. That's because the decision makes clear that the central bank doesn’t have carte blanche to follow through on Draghi's pledge.

Many economists believe the only way to resolve the tensions around the ECB’s mandate is to amend the EU treaties to both broaden the bank’s purview and to give the eurozone fiscal powers, which would make the currency area less dependent on the ECB in times of crisis.

"Fiscal powers" means to give the bank parliamentary powers and it means us giving up our powers. The Politico article continues:

'It is clear that the eurozone cannot continue to muddle through with creative interpretation of EU law by the ECB,' said Stanislas Jourdan, executive director of Positive Money Europe ... 'More than ever, eurozone institutions, starting with the ECB, are in need of a treaty overhaul.'

What this will actually mean is that a centralised Europe will be given more powers and that we will consign our country to being a county council within the EU. Some would argue that perhaps we are already and that we just take whatever they tell us and get on with it. At the time of the bailout, we took our medicine and got on with it and sacrificed the people, our housing and our homeless in order to ensure that Europe moved forward. Will the Minister of State clearly lay out the Government's stance on this, because it is very important? Over the next 18 months we will see a European treaty change to broaden and increase the powers Europe has. Is this what the Government will support and call for?

1:55 pm

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Deputy Micheál Martin referred to the deeply corrosive effect of no action being taken in respect of the suspension of parliament in Hungary. I have the same concerns about the suspension of that parliament. What I think is deeply corrosive is the gap between the language used by our leaders in the Government here and their counterparts in Europe and the reality on the ground. This is what is deeply corrosive to the democratic process and I am very concerned about it. Lovely words were used today by the Taoiseach or the incoming Taoiseach – I am not sure which – about Europe. These words included "solidarity" and "equality", and there was mention of the four freedoms. The reality is so removed from this that it beggars belief one would use this language without looking at what is happening in our name in Europe.

While I welcome its belated effort, when this crisis originally broke the EU failed to mount a collective humanitarian response and has struggled for months to put together a package. It blatantly ignored the relevant article in the Lisbon treaty that spoke about acting collectively if a country came under threat from a natural disaster or other type of problem. The EU is founded on cross-border freedom and mutual solidarity but several countries, including Austria and Germany, unilaterally moved to close their borders. Of course, Ireland did not close its border. Italy, which has suffered tremendously, invoked the disaster fund, which is meant to facilitate the sharing of vital medicinal supplies between members, but not a single European country responded to Italy's call to activate the fund. It was not until weeks later that the EU approved a €50 million package to Italy to help produce ventilators and personal protective equipment. If I have an opportunity I will return to this point.

Most EU nations imposed export restrictions on medical supplies. That was some solidarity. Germany blocked shipments of 240,000 masks to Austria. The French authorities commandeered the distribution of 6 million masks from Swedish companies that were already contracted to other countries. The people who were most down did not rely on the ever-increasing closer union. A team of Chinese health experts arrived on 13 March to help Italy. Russia sent help. Cuba, which has been subjected to more and more restrictions through the US embargo, about which Europe says nothing, sent doctors. Criticism of the treatment of Italy came from the European Commission President, who said a heartfelt apology was owed to Europe. The question must be asked as to whether the EU finally mobilised because of shame with regard to action taken by China, Russia and Cuba.

On the Greek islands, 42,000 asylum seekers are trapped in five hotspots but nobody has mentioned them today. Not a single one of our esteemed leaders of the bigger parties mentioned this situation. There is capacity for only 6,000 people. On Lesbos, there are 20,000 people in a camp. These figures come from the European Union Agency for Fundamental Rights. Our fundamental rights are absolutely being affected by the measures taken.

On Lesbos, there are 20,000 people in a camp built for 2,840 while on Samos there are 6,000 people living in a centre for 650 people, and so on. There has been no action by Europe on Palestine and the serious situation for those who have been placed under a blockade by the Israelis. There are many other examples.

In my final minute, I want to go back again to language. We have used the language of war to deal with this virus. Indeed, the Minister, Deputy Harris, has repeatedly used the language of war and has used personal words in respect of the virus, saying it is vicious, nasty, not nice, horrible. What is not nice is our reaction to dealing with it in a prepared way. What is nasty is our failure to have our health service in a position to deal with the virus. Europe is behind that because, following Europe's directions, we ran down our health service for a very long time and we built up our military capacity. If we are serious about a new world, about learning something and not going back to the type of unsustainable development that we had, in every sense of the word, then the first thing for the Minister of State, Deputy McEntee, to do is make a statement here today on our military budget to Europe. She should make a statement on stopping our payments under Permanent Structured Cooperation on Security and Defence, PESCO, and should state that we will withdraw from PESCO. If we are seriously interested in humanitarian help, then let us look at what is going into a military budget in the guise of pretending that we are defending each other. When the test came and we had to defend our countries against the so-called nasty, vicious virus, we utterly failed to do so as Europeans.

2:00 pm

Photo of Alan FarrellAlan Farrell (Dublin Fingal, Fine Gael)
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We now move to the questions and answers session with the Minister of State, Deputy McEntee. We have 20 minutes. I will take the Deputies in order. Does the Minister of State want to make some brief remarks first?

Photo of Helen McEnteeHelen McEntee (Meath East, Fine Gael)
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A number of issues were raised. I have a final statement which I will read after the questions.

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
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How much time do I have?

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Deputy Micheál Martin must ask a question.

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
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Deputy Boyd Barrett is informing me as to how to ask a question. I will return the serve later.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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No problem.

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
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The decision of the German Federal Constitutional Court is not definitive in terms of European legal jurisprudence, I would suspect. The ECB may yet have an escape route, so to speak. However, this does reveal a mindset consistent with an ongoing divide. Some see a collective approach to crisis, be it the financial crisis or in this context of a global pandemic, from European institutions. They believe that the ECB is independent and that we do need a collective response either through a coronabond or through financial instruments which, to be fair to the bank, it has deployed. Has the Government received legal advice from the Attorney General on this? What has been the initial response from the Commission in terms of the legal experts and the sense of the next stage in this? There is a stage where the Bundesbank has three months, I think, to engage but I am more interested in the European understanding of the court. It is the first time that a national court is essentially challenging the European Court of Justice, apart from the financial issues and the ECB. This is a very serious development, which could undermine the entire cohesion of the EU itself. Does the Minister of State share that concern?

2:05 pm

Photo of Helen McEnteeHelen McEntee (Meath East, Fine Gael)
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Unfortunately, I am not able to give the Deputy a detailed response on that. Overall, the judgment of the court is primarily a matter for consideration by the German Government, the Bundestag and the Deutsche Bundesbank. Obviously, the institutions will have to respond to it and we will, perhaps, be able to discuss it in further detail when they do. I understand that other member states will also make a statement or a judgment on it and we will be one of those. I do not have further detail other than that.

Rose Conway-Walsh (Mayo, Sinn Fein)
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Is the Government concerned about the high interest rates to be charged by the Irish banks to distribute the EU financial package? Has it quantified the projected amount that is going to be made by financial institutions in delivering the Covid-19 package? The reason I ask is that the European Central Bank rates today are the lowest ever on record. Deposit rates are minus 0.5% and refinancing rates are 0.05%. It is very difficult for businesses which are taking on more debt to carry up to 4.5% in that amount. These businesses are only coming out of the last financial crash, the impact of the banks and how the banks treated them. Is the Minister of State concerned about this and what are the plans on that? Is the Government measuring the EU rates across the member states to see where we are at?

Photo of Helen McEnteeHelen McEntee (Meath East, Fine Gael)
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Much of that question is for the Minister for Finance and I do not have the level of detail for the Deputy. Whether it is at a national level or throughout the EU we are trying to ensure, through the EU funds being provided, that we provide cheap funding or support to our citizens and to our businesses. The details on the three safety nets that have been set out are still being worked through. In response to an initial question, we will be on target to see that in the first week in June. I refer to how we will access that and which of those three we will access, probably most likely the focused safety net for our citizens and for our companies. The third one, when it comes to the European Stability Mechanism credit line, is the one the Minister has indicated that we are less likely to take up on. Again, it is about providing support in as cheap a way as possible for our citizens. As to what is happening in other member states, I do not have that level of detail for the Deputy.

Roderic O'Gorman (Dublin West, Green Party)
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Is the Minister of State confident that any changes to the multi-annual financial framework, MFF, necessitated to fund the Covid-19 recovery will not negatively impact on the existing funding priorities for the Government such as CAP and the European green deal?

Photo of Helen McEnteeHelen McEntee (Meath East, Fine Gael)
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I cannot be confident about anything at the moment because it is still under consideration. We have consistently said - and the Taoiseach repeated it at the European Council last week - that Ireland is willing to pay more when it comes to the next MFF. We said this before the Covid-19 virus hit. Now more than ever it is crucial given the additional challenges we are facing. What has also been highlighted is that now more than ever we need to protect our more traditional policies, but as I have said previously, these are not old policies or traditional policies, they are as relevant now as they ever have been, especially focusing on food security and on the impact and relevance for our rural economy, and particularly as we try to recover from Covid-19. The focus of our priority will continue to be on policies round CAP and cohesion, and on research and innovation. We have always said that Ireland would pay more but not to the detriment of those key areas. We had taken this position before this crisis, and it is one we fully stand by.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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There is a very credible proposal coming from Spain on perpetual bonds, which would not mean an additional debt burden and which could be afforded with regard to the interest rate that would be payable Europe wide. It would be very similar to the Marshall aid plan post the Second World War. This is a disaster and is not unique to any individual member state.

Real solidarity requires that kind of approach, where a debt burden will not end up being imposed on states that cannot sustain it. Is that on the table? It is a credible proposal. What is the Government's approach to it?

2:10 pm

Photo of Helen McEnteeHelen McEntee (Meath East, Fine Gael)
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My understanding is that all proposals are being looked at, including the Spanish proposal. It is something our finance ministers are looking at. The recovery fund was to be outlined today but that has been postponed, perhaps until next week. As the Taoiseach said earlier, we support putting a mechanism in place, whether it is a mixture of loans or of grants, that is timely, that will reach people when they need it most, that is targeted, but also that is temporary because we hope we will come out of this crisis as quickly as possible. That is the approach we are taking. We have not specifically targeted or focused on any one particular policy or priority area. We have said that if the mechanism is targeted, timely and reaches the people who need it first, we will support it but, again, much of the detail will be outlined by our ECOFIN ministers. My understanding is that it should be in the next week or so.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The Minister of State partly answered my question but I will ask it nonetheless. Many areas are impacted by the current situation but there is one that, it seems to me, the Government should have been thinking about already in our discussions with Europe. One thing that has been revealed clearly is that our public health system is under capacity. We have the lowest levels of ICU and of GP cover and the fewest hospital beds as a proportion of our population. We have sailed dangerously close to the wind. I do not think anybody could disagree that we need permanent increases in the capacity of our health service, across the board. We need to make the case to Europe that there have to be increases in the expenditure in those areas to bring up our health system to safe levels. I wonder whether the Government has thought about that and whether it is discussing it with Europe.

Has there been any discussion about what Israel is doing with the Palestinians, as was mentioned by Deputy Connolly? The Palestinians believe that Israel is using the public health emergency - the Covid-19 crisis - as an opportunity to advance further illegal annexations of Palestinian land in the West Bank. That is very concerning and I hope the Government and Europe are responding to it. Will the Minister of State indicate whether there has been a response?

Photo of Helen McEnteeHelen McEntee (Meath East, Fine Gael)
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On the Deputy's general comment, while everyone accepts that the initial EU response was not as quick as we would have liked, one of the challenges in responding to Covid-19 is that we are facing a health crisis. What happens in our health system is different from that of Germany, France or Greece. It is a national competency, and trying to respond collectively to the crisis was difficult. While we fell down in certain areas, we have tried in the initial stages - whether through the relaxation of state aid rules, the response investment initiative, the €750 billion provided through the European Central Bank or the three other pillars that, we hope, will be in place by 1 June - to provide funding to invest in our healthcare systems to ensure that our priority is to save lives and protect the health of our citizens.

One matter we are discussing, and the Commission has published a paper on this, is how we will exit the crisis safely. The exit strategy is very much in line with what we have been looking at here in Ireland, whereby we will have an increased capacity for testing and for contact-tracing. Most importantly, not only if there is a second wave of Covid-19 but if anything like it happens again, we will have capacity within our hospitals to deal with it. We all need to reflect on the matter. Health ministers in the EU are engaging regularly as to how we can, collectively, respond to this kind of crisis again. It has highlighted gaps that we will need to fill, whether in respect of personal protective equipment, or types of medicine, medical equipment or machinery. Acknowledgment will certainly be taken that there are areas in which we need to improve. Health is still a national competency and we cannot move away from that, but we can certainly learn from this and from one another.

The second issue was not raised at the latest European Council meeting but I will get a response back to the Deputy.

2:15 pm

Photo of Mattie McGrathMattie McGrath (Tipperary, Independent)
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Is the Government's opinion the same as it was after the February meeting of the European Council when the Taoiseach said that Ireland was in a position to be a net contributor to the MFF over the next seven years and would pay more? In view of where we are with this devastating pandemic and the lack of solidarity from Europe, is that still the Government's position?

Photo of Helen McEnteeHelen McEntee (Meath East, Fine Gael)
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I refer to my earlier response that this is still our position. Our view is that now more than ever we have additional areas of concern we need to respond to. Our initial view was always that, while the EU is getting smaller, it should not have a smaller budget because our challenges are expanding. The coronavirus has added to that so our view remains the same. We should increase our overall budget. We have seen how we have benefited from our membership of the EU in the funding we have received back. We have also seen how we have benefited from our membership of the Single Market. There was a question earlier on what the Taoiseach means when he talks about going back to a fully functioning Single Market. The Single Market is integral to the free movement of our goods and people and to the functioning of our economies. It is important that we protect it and that as we work through this crisis, the Single Market, which is still not complete and requires much work in the areas of goods, services and the digital single market, we continue our work and use it. As we develop in these areas, we must adapt to the situation we find ourselves in and that particularly applies to the digital single market. To answer the Deputy's question, we still feel we should pay more but, at the same time, we are not willing to pay more if priorities such as CAP, cohesion funding and investment in research and innovation are not protected.

Photo of Carol NolanCarol Nolan (Laois-Offally, Independent)
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I want to ask about the European Commission private storage aid. We know that €80 million was allocated but this is wholly inadequate and insufficient. That has been pointed out by all farming organisations. Is there an opportunity to negotiate a better deal on this? The €80 million that has been allocated is to cover all of the EU. It is a drop in the ocean. Is there an opportunity to discuss and negotiate this further?

Photo of Helen McEnteeHelen McEntee (Meath East, Fine Gael)
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The initial response to the overall package was disappointing in that our farming community expected more but this is only an initial response. The dairy sector, in particular, was welcoming and responsive to this support. What we have done, particularly the Minister for Agriculture, Food and the Marine, Deputy Creed, is to lead the charge in a response to the Commissioner to seek additional support not only for our dairy sector but, in particular, for the beef sector, where we feel that kind of support was not initially provided. All 26 other member states have signed this letter and the Minister outlined last week that he would engage with the Commissioner again. He has been in constant communication with his agriculture ministerial colleagues this week but we would like to see further support. What has been provided so far will not suffice. The Minister is leading the charge at a European level to try to get a better response from our Commissioner.

Photo of Thomas PringleThomas Pringle (Donegal, Independent)
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I want to go back to what the Minister of State said about a fully functioning Single Market. The Taoiseach mentioned that he considers that a referendum would be required to implement change to that. Does a fully functioning Single Market include fiscal powers for the eurozone? What is the Government's stance on that?

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I reiterate my question on giving money to the European militarisation process. Can the Minister of State confirm that we will withdraw from PESCO, or at the very least, suspend our contributions under it?

Photo of Helen McEnteeHelen McEntee (Meath East, Fine Gael)
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I am not sure about the percentage of our overall spend but it is minuscule. In particular, if one looks at our membership PESCO, we are involved in programmes such as maritime surveillance and peacekeeping. We are not in any way moving towards, as is often suggested, an EU army. When one looks at our triple lock system, our neutrality, in the same way as for other member states which have joined PESCO, will not and cannot be impacted or changed without the wish of Irish citizens.

A vote would obviously be required to do that, but I do not see it changing any time soon.

What is important, as I will outline shortly, is that we are providing a massive amount of humanitarian assistance and aid through our Europe response. In terms of Ireland's specific response, we have provided €60 million in funding, which was previously committed, in direct or repurposed grants to enable our UN and other partners to respond rapidly to the situation on the ground. We have tripled our funding to the World Health Organization, and the Taoiseach, in a conference that took place last week, pledged €18 million to Gavi, the Vaccine Alliance. A huge effort is being put into supporting and protecting the member states and countries outside the EU that do not have the necessary finance or capabilities, whether that is to do with vaccines or otherwise. This is where the money is going. The suggestion that a large amount of money is going into defence or any type of EU army is simply not the case.

Regarding the Single Market and any type of treaty change, it was the case before the coronavirus, and I do not believe it has changed, that any move towards a treaty change is not something we would support at this point. Again, I can be corrected on that but I do not believe it is something to which we would be positively disposed, nor do I believe we are moving in the direction of individual member states becoming like county councils. I do not agree with that statement.

In his statement the Taoiseach set out the wide range of measures already taken or under development at EU level to protect citizens and businesses during the current crisis. Like at home, the focus has been on protecting life and health in the first instance as well as working to mitigate economic damage and to chart a path to recovery. Leaders have also correctly recognised that for the fight against Covid-19 to be successful it must have a global reach, and the EU has an important leadership role to play. We saw this in action on Monday when the EU took the lead in hosting a pledging conference during which €7.4 billion was pledged in support of the search for a vaccine, for medicines and for tests. This is something that Ireland strongly supports and, as the Taoiseach outlined, we announced a pledge on behalf of the Irish people of €18 million to Gavi, the Vaccine Alliance. This will be paid over the course of the next five years so that the poorest countries in the world will have access to a Covid-19 vaccine if, as we obviously hope, and when it is developed. That funding adds to the €60 million that Ireland has committed previously. We have quadrupled our contribution to the World Health Organization to €9.5 million.

Until there are effective diagnostics, treatments and a vaccine universally available, every region and country remains vulnerable to a renewed surge of the pandemic. On 8 April, development Ministers endorsed the Team Europe global response to Covid-19 with €15.6 billion mobilised by the Commission for the European Investment Bank and over €4 billion via member states targeting fragile and vulnerable countries. Such countries are facing enormous health and economic challenges as a result of the pandemic. The Team Europe collective approach is designed to approve a fast response on the ground where it is needed most, supporting health systems and also helping to alleviate the socioeconomic impacts of Covid-19. In the next 20 minutes the Taoiseach will take part, by video conference, in a summit of the EU and the western Balkan leaders. The key focus of that summit will be co-operation and support between the EU and the region throughout this crisis. On 29 April, the European Commission announced over €3.3 billion of EU financial support, mobilised jointly with the European Investment Bank, to specifically benefit the western Balkan citizens. Having been on a conference call this morning with many of the leaders, I believe that, now more than ever, as we move towards the opening of the enlargement session process with North Macedonia and Albania, it is important that citizens see this solidarity. It is also important as we exit this crisis that we work in unison not just within the EU but also with our partnering countries and states.

We have seen from the beginning of this crisis that the virus does not respect borders and does not recognise countries. To beat it and to forge a recovery, Ireland and the EU must think and act globally. This week the EU took a significant step in this regard. Ireland has made it very clear that it is willing and ready to play its part with its EU partners and the rest of the world in the global fight against Covid-19.

Sitting suspended at 2.10 p.m. and resumed at 2.30 p.m.