Paschal Mooney (Fianna Fail)

Mr. Forde served briefly as the interim Prime Minister of Australia for one week in 1945, following the death of his predecessor, Mr. John Curtin. Despite the fact that Mr. Forde came from County Leitrim, he was not re-elected as Prime Minister because he did not get enough votes, as the late Mr. Frank Cluskey would have said. He went on to serve as an ambassador for Australia during his distinguished political and diplomatic career. I am particularly pleased that our friends from Australia are here for my contribution. Their presence emphasises once again the strong link between Ireland and Australia.

I have started my speech positively, although I had intended to commence on a negative note by saying the Lisbon reform programme has been a failure. If one remembers the discussions which took place when the programme was first mooted and the concepts which underpinned it at the time, one will recall that it was intended to put in place a ten-year plan to lift the European Union from its economic malaise and put it on the world stage as a region of strong competition, high employment and increased prosperity for all. That we are discussing a relaunched Lisbon Agenda tells its own story. While the Lisbon Agenda has been a failure since its establishment, the economy has been outstandingly successful during that time. I agree with Senator McDowell that the agenda has not worked because the differing social models throughout the European Union have led to a lack of consensus.

Senator Quinn has mentioned that one no longer hears anti-Irish jokes in this part of the world. I am not sure whether people tell anti-Irish jokes in Australia — those who try to do so probably get punched in the face. The anti-Irish humour of English comedians was the bane of our lives for many years. Senator Quinn correctly states such jokes are no longer heard because it is now cool and sexy to be Irish. One cannot call the people of a country thick or stupid if that country is doing as well as Ireland.

As a member of the British-Irish Interparliamentary Body, I was present last week at a function at which an initiative being pursued by the Federation of Irish Societies, the umbrella body for Irish societies in England, and the Irish Embassy in London was launched. Members of the parliamentary UK Labour Party were invited to the function which was hosted by Lord Dubs, a Labour peer who is a vice-chairman of the British-Irish Interparliamentary Body to hear at first hand the concerns of the Irish community in Britain. The function was graced by the presence of the UK Deputy Prime Minister, Mr. JohnPrescott, who spoke about the various social models within the European Union. He said he had been present the previous week at a meeting in Brussels at which the matter was discussed. He said that when he mentioned the Anglo-Saxon social model at the meeting, one of his French colleagues asked whether France was included under that definition. He responded by saying he meant the British-Irish model. While Mr.Prescott's remark brought a wry smile to those in attendance, it had further significance for me as an Irish parliamentarian. Not only was it interesting that a UK Deputy Prime Minister attended an exclusively Irish function in the House of Commons to talk to the Irish community about Irish interests, it was also significant that Mr. Prescott put Ireland on an economic par with the United Kingdom. The significance of his remarks show how far we have come and was not lost on the Irish politicians present.

I am sure the Government has considered, in the context of the various social models found throughout the European Union, that the main reason the French and Dutch electorates voted against the proposed EU constitution was that they considered, in their own way, that their social model of protectionism and regulation was somehow under threat. They did not necessarily base their judgments on the wider European vision, or the sort of things about which we talk nobly inside and outside the House — being good Europeans and advancing the European agenda. They voted with their concerns about the money in their pockets and the bread on their tables in mind. All of us in Europe, not least Ireland, face a real challenge to ensure the debate on the proposed EU constitution is kept separate from such regional and local issues. We need to meet this challenge if the European Union is to make strong progress at a global level.

The economy is strong. I noted a significant comment in the Minister of State's excellent presentation. When civil servants prepare draft speeches, they sometimes fail to outline what they are thinking in stark terms. I accept that the Minister of State makes a strong input into his own speeches. He said:

Our levels of competitiveness must be closely monitored and, in particular, the ongoing reliance on the construction sector for our current level of output. We must be sensitive to the potential impact of an eventual reduction in construction output levels.

Some economic statistics released into the public domain last week clearly indicated this country's over-reliance — I use the word advisedly — on the construction sector. As Senator Brian Hayes said, we are in serious danger of seeing a significant reduction in employment levels and consumer spending, if not quite back to the bad old days, if we do not strengthen the other building blocks of our economic success, as outlined by the Minister of State in his presentation. The construction sector has traditionally been the engine room of this country's economy. It has always been the case, even in the bad times, that when the construction industry does well, the country does well. While I do not want to sound a note of warning, I have to state I am concerned about this country's economic outlook. I welcome the macro-economic and micro-economic guidelines in the Lisbon national reform programme for that reason.

The Minister of State also referred to productivity. We all know this country is losing its manufacturing base rapidly, a trend that is noticeable throughout Europe. We need to consider the number of jobs which continue to haemorrhage from this country's manufacturing sector, as well as the huge increase in the services sector, which is partly driven by migratory labour. I heard someone say on radio yesterday that we should thank God for migratory labour because we do not know what we would do if we did not have it. Who would run our hotels and our services sector in general? I am not an economist, but I know, just like everyone else, that that sector is driven by consumer demand. If people get a feeling that the sentiment is not with us and that there might be a need to put money aside for a rainy day, they will cut down on consumer spending, for example, on an extra meal a week or an extra weekend break. What impact this will have on our economy is not yet known.

The Minister of State said: "A greater emphasis must be placed on productivity by encouraging greater levels of innovation and entrepreneurship." While we all agree on that point, the Minister of State went on to say rather abstractedly: "A range of key initiatives is under way to drive this development." I do not believe any Government would have an answer to this. If the manufacturing base is moving to low-cost countries because we have a problem with competitiveness and wages and the cost of living are too high, no Government would last five minutes if it was to suggest it would dampen economic demand, increase taxes and try to smooth out the economy. Ireland cannot do this because it now has a deregulated economy. The thrust of Irish economic performance in the past ten years has been deregulation which has taken place across the economic field.

Senator McDowell, who is ideologically a socialist said he could not——