Déirdre de Búrca (Green Party)

I welcome the Minister of State and second the motion proposed by my colleague, Senator Dan Boyle.

This motion addresses the growing challenge of unemployment facing the country. We are all aware that the global community is grappling with an economic and financial crisis but that we have our own domestic strain of that crisis. We face an uncertain future and it is clear that growing levels of unemployment will be one of the major challenges for this and future Governments. If the unemployment trend continues we will see greater pressure on welfare systems and growing levels of social unrest throughout the European Union. That is undeniable. It is imperative that, as policy makers and as members of Government, we give the growing unemployment levels top political priority.

I propose to look at initiatives taken by the governments of five other member states, Spain, France, Germany, Austria and Denmark, to see what we can learn and rapidly implement in Ireland.

In Spain there has been the same kind of collapse in the construction industry as we have experienced. This downturn has been responded to through increasing public building programmes, initiating energy efficiency programmes such as retrofitting housing and providing land for public building purposes. Some 80 measures were introduced to improve employment between 2008 and 2009 and there have been different extensions to unemployment benefit. A local investment fund worth €8 billion and a special fund for the promotion of the economy and employment worth €3 billion have been established. Of them, €500 million is dedicated to environmental projects, €500 million for research and development and €400 million to upgrade police and civil guard stations. The Spanish Government has also allowed local governments to increase their permitted budget deficits from 0.05% of GDP to 0.5% of GDP, thus facilitating the injecting of a further €5.8 billion into the economy. A royal decree extended benefits to workers in special situations. Those temporarily laid off will be able to collect unemployment benefit, subsidies will be provided for companies which hire an unemployed person, as well as lower social security payments for companies which reduce employees' working hours instead of dismissing employees. Incentives will also be provided by the Spanish Government to companies which hire workers on a part-time basis, as the incidence of part-time work is still low in Spain.

In France, €11.4 billion has been allocated to reimburse companies in order to improve their capital and cash situation and to give them the resources they need to invest. This includes the early reimbursement of the research tax credit or value added tax from the start of 2009. The State will invest an additional €11.1 billion in a public investment programme which will include support for housing, with a two-fold increase in zero interest rate loan amounts, in addition to welfare support. A total of €4 billion will be invested by large public companies to modernise and develop the railway and energy infrastructure and the postal services. In addition, President Sarkozy has taken up a trade union proposal and announced the creation of a social investment fund which could allocate up to €3 billion for employment and vocational training.

In Germany, among the new policy measures adopted is the Pact for Employment and Stability in Germany: Safeguarding Jobs, Strengthening the Forces of Growth and Modernising the Country. A supplementary budget was also adopted to implement the pact. The focus is on safeguarding jobs and businesses' capacity to invest. The measures will markedly increase investment in future oriented sectors, with educational infrastructure at the forefront. It is also intended to supply credit to healthy competitive companies and further empower the workforce to gain qualifications. The total volume of the package of measures in the German public sector budgets in 2009 and 2010 will be almost €50 billion. Together with steps adopted in 2008, this represents total funding of approximately €80 billion to support the economy. Financial assistance has been provided by the Länder with particular focus on educational infrastructure, especially nurseries, schools and universities which make up two thirds of overall planned expenditure, and other infrastructure, particularly hospitals, urban development and information technology. A €100 billion programme of loans and credit guarantees will be implemented by expanding existing measures directed at small and medium enterprises and introducing a comparable loan programme for larger companies. The funding available to support small and medium enterprises and research and development projects will be extended in 2009 and 2010 with about €450 million in additional funding being provided per annum. The spread of broadband networks will be accelerated, guided by a comprehensive broadband strategy. Extra funds of approximately €2.5 billion will be provided by the German Government for activation, support and training measures for jobseekers, as well as short-time and agency workers, and 5,000 additional posts will be created at federal employment agency offices to improve placement of and provision of support to jobseekers. Income tax will be reduced. The statutory health insurance contributions paid in equal parts by employers and employees will be lowered. At the same time, a sustainable fiscal policy and a budget rule to put consolidation back on track has been adopted by the German Government, which will mean that new legislation on the lines of the EU Stability and Growth Pact will be adopted to impose a constitutional limit on net borrowing.

In Austria, the short-time working rules have been amended. In 2009, the Austrian Parliament endorsed an amendment to the short-time working rules with the aim of making them more flexible. This is due to a continuously growing demand by employers for short-term working arrangements to cope with the current economic downturn. Employers and trade unions have largely welcomed the decision. Under short-time working arrangements, working hours may range from at least 10% to a maximum of 90% of normal working hours. The introduction of a new short-time working scheme in combination with further training allows employers to receive a special training subsidy if they offer their employees, during the hours not worked, training course intended to improve workers' future employability in the labour market.

In Denmark, the practice of work sharing is growing extensively to help to mitigate the significant increase in redundancy during 2009 arising from the economic recession. The priorities for the Danish Government are enabling faster access to further training by increasing the funds available, establishing a national alert system to offer support as early as possible, increasing the monitoring of the labour market's development and introducing more flexible rules regarding work sharing arrangements.

The challenge at European Union level is to start examining how the European economy can be strengthened in a way that will increase job creation across all the member states. It is a little misleading to speak about a European economy at present because what we have is a Single Market with a collection of individual, national economies. The concentration at political level now must be on European-wide measures that will stimulate infrastructural projects of a scale that will have job creation benefits for all member states. My colleagues in the European Parliament have called for an EU-wide stimulus programme, a green new deal, to make €500 billion available over a period of five to ten years from both public and private sources. They have large, ambitious infrastructural projects in mind such as an EU-wide electricity grid and an offshore wind farm stretching from the North Sea to the Iberian peninsula. This is the way we should be thinking but political will across all member states is required, particularly in the member states whose economies are stronger and who will probably have to carry some of the weaker economies. We should be working at European level to promote that type of approach so a genuinely stronger European economy can emerge that will deliver much greater benefits to European citizens in terms of addressing the challenge of unemployment.