John Gilroy (Labour)

I welcome the Minister to the House.

The chance to hold the Presidency of the EU offers Ireland a wonderful opportunity at this most trying of economic times. I was very interested to hear much of what the Minister of State said recently, especially the comment that holding the Presidency offers a chance to demonstrate that Ireland is a constructive and committed member of the Union and that, more important, membership has been and remains a very positive experience for Ireland. In the background noise of the current economic crisis, some commentators have depicted membership of the European Union as part of the problem, but this fails to recognise the benefits that have accrued and continue to accrue from being a member of the Union.

It is been pointed out that Iceland, which is outside the eurozone, has pursued a different path than Ireland and consequently emerged in a better position. Some commentators have attributed this result to Iceland being in a position to use its monetary position as a policy tool, which Ireland, as a member of the common currency area, cannot do. This fails to recognise the scale of the problem facing Iceland, including the destruction of wealth and savings and the massive reduction in the standard of living for ordinary Icelanders. A policy instrument pursued by Iceland, which we do not hear much about, is the imposition of capital controls. This has prevented a great flight of capital from Iceland. It is easy to say that we would be in a better position if we were not a member of the European Union. However, this argument, which we have heard time and again, ignores the complexity of the economic circumstances.

We do not have control over monetary policy. One can only imagine what would happen to Ireland if we used capital controls as a policy in an economy where foreign direct investment accounts for over half of wealth creation and a similar percentage of employment. The imposition of capital controls would ensure we closed ourselves off to future investment and undermined any existing investment, on which we are so highly dependent.

One of the main attractions for financial direct investors is the relatively low rate of corporation tax, in addition to the educated and flexible workforce and access to European markets. We have been more than successful in attracting foreign direct investment relative to other countries and we continue to punch above our weight. In the past few months, we have heard the announcement of over 2,000 jobs as a direct result of this policy. Membership of the European Union is vital for our recovery and access to funding, and for the networking afforded to us among our European partners.

It has been stated that in accepting membership of the European Union we have handed over some sovereignty, but I do not accept that argument. The concept of sovereignty is ever-changing and ever-evolving. This is good because we have moved a long way from the narrow nationalism we witnessed in this country, the Balkans and other parts of Europe historically. The European Union has played a huge role in ensuring member states can resolve their differences by way of dialogue. Everyone will agree that this must be good. Sovereignty means much more than the ability to say "No". Membership places us at the very heart of decision-making in Europe. Ireland represents but 1% of the European Union's population, yet its voice can be heard. By holding the Presidency we can set the agenda across a range of policy areas and I look forward to hearing the Minister of State's views on this. The international media will focus its attention on Ireland during the Presidency and it gives us a wonderful opportunity to speak directly to the world without having our views mediated through a biased international commentariat.

We should not just look to Europe for what we can get out of it. We have made a major contribution to Europe as a player on the world diplomatic and political stage. Most progressive thinking on equality and reform has its origins in Europe and has found its way into our legislation, often in opposition to conservative forces in Ireland, through European legislation and we should be thankful for that. Setting the political priorities for the agenda is vital. On the last seven occasions we have held the Presidency, all Governments of all shades have done the country proud.

I am glad we are members of the European project. In difficult economic times, there is a populist temptation to retrench our positions and fall back on the simple but dangerous introverted Nationalist ideology. This must be resisted because therein lies the road back to the dark days we were too used to in this country. It is good the Presidency is coming round to us at this time. With it comes the opportunity to reassert our commitment to be part of the European project, which has transformed our country and the Continent for the better. The Labour Party originally opposed entry into the European Economic Community 40 years ago but it subsequently fully embraced the project. We are internationalist in outlook and look forward to the Presidency where we can reassert our commitment to the EU. It is an exciting prospect for the country, the Government and the Minister of State, who we are sure will do Ireland proud.