Don Lydon (Fianna Fail)

I welcome the Minister of State to the House and commend him on his work in European affairs. I welcome this opportunity to consider the Lisbon national reform programme. It is difficult to overemphasise the importance of the success of the Lisbon process, particularly during the period of reflection on the future of Europe during which questions have and will be asked about the direction of Europe. The success of the European project has and will be grounded in economic success. However, the citizens of EU member states cannot be expected to be taken on the European journey without being informed of the destination and itinerary. It is, therefore, appropriate that we consider the national response to the Lisbon initiative here today.

The European Union faces two over-riding economic and social challenges in forthcoming decades. The first challenge lies in Europe's lack of competitiveness vis-À-vis the US and the emerging economies of the Far East, while the second challenge lies in the aging profile of Europe's population. Something must be done about the fact that we are not replacing ourselves. In response to these challenges, the EU Heads of State and the Government decided at the meeting of the Council of Europe in Lisbon in 2000 to make Europe "the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion". A subsequent Council meeting in Gothenburg subsequently added the concept of environmental sustainability.

I am a member of the Oireachtas Joint Committee on European Affairs, a sub-committee of which considers European legislation. This sub-committee considered the recommendations of the Commission in respect of employment policies — COM (2004) 239 and COM (2005) 141. These recommendations follow from the Lisbon initiative. The Joint Committee on European Affairs has also considered this matter which clearly outlines the issues at stake. The Lisbon Agenda is a wide-ranging set of policies which reaches into all aspects of the European economy and much of society. It covers areas such as the information society; policies in respect of enterprise, innovation and research; the Single Market; education; employment; social protection; social inclusion; the environment and macro-economic policies. Its implementation will take place through a mixture of European and national policies, not on the basis of legislation and sanctions but on a range of commonly agreed targets and benchmarking among member states which is known as the open method of co-ordination. It is now widely believed that the range of initiatives which began in 2000 have not made the progress that might have been expected across Europe and that commitments made by some member states have not been delivered. Ireland has a very positive record that is regarded as a model in some respects for other member states.

Some speakers have mentioned that when they travel abroad, they are asked how Ireland has done it. The features of the Irish model include high levels of sustained economic growth, relatively low inflation and high levels of employment. Each EU member state needs to decide for itself how it can strike the right balance of measures to address its particular challenges. There is no single template that is ideally suited to all member states. There is no template for economic success. Therefore, the Lisbon approach which involves putting in place national reform programmes is the right one.

The Taoiseach has identified competitiveness, more and better employment, sound economic policies and sustainable growth as the four elements of economic success. If we increase the resources being allocated for research and development, we will take a significant step towards achieving further success in these areas. The EU Commission has proposed an ambitious expansion in this regard in its package for the seventh framework programme. It is regrettable, however, that the programme has not placed a greater emphasis on small and medium-sized enterprises which will be one of the innovative motors in driving the Lisbon process forward. The Commission has asked member states to focus on economic reforms and to invest in the realisation of a knowledge society, based on human capital, education, research and innovation. As many Senators said, Ireland has made very good progress in reaching the goals set. The Lisbon programme of national reform will drive this success even further.