Aideen Hayden (Labour) | Oireachtas source

I welcome the Minister of State and congratulate him and the Government on the highly productive and successful way in which we are currently managing our relationship with the European Union. Not only have we successfully exited the bailout programme but we have achieved critical concessions along the way, such as the terms under which we were able to deal with the vast liabilities of Anglo Irish Bank. Our handling of the European Union Presidency ensured great progress in building a stronger economic and banking framework for the future. However, everyone should acknowledge that this work is by no means over.

Perhaps the most important point is the way our representatives have gone about doing this work on a range of policy fronts. The reputation of Ireland throughout Europe and the world has been greatly strengthened after a period of neglect, complacency and arrogance during the latter years of the Celtic tiger. One of the key outcomes of the Irish EU Presidency was the launch of the youth guarantee scheme throughout Europe. I applaud the work of Labour Party MEP, Ms Emer Costello, on the issue in the European Parliament.

We should approach the implementation of the guarantee with missionary zeal. As some countries have demonstrated, particularly in Scandinavia and the Netherlands, if training supports are properly applied and we do not simply sit back waiting for people to show up at the doors, then the results can be excellent.

I wish to raise an issue relating to our future relationship within the European Union. I do not believe we are short of fundamental and serious issues to discuss, but within the coming years there is a distinct possibility that Scotland may withdraw from the United Kingdom and that the loss of Scottish votes, in turn, could ratchet up the chances of a referendum, leading to the rest of Britain pulling out of the European Union. If Britain were to leave the European Union it would have a major impact on Irish trade and on our relationship with Northern Ireland as well as a host of other issues. Not every impact would be negative, since some multinational companies might decide to relocate their activity from Britain to Ireland to stay within the EU. However, either way the issues are real. I wonder what thinking is under way in government about how we would manage such a scenario. For the sake of argument, would we support an independent Scotland's application for EU membership? Have we considered the implications for other older democracies with large populations which have aspirations for a separate identity? How would this tie in with the current enlargement of the European Union? Would these countries which would have to apply for membership again stack up behind Serbia?

We have seen some positive issues such as the emergence of the multi-annual financial framework to 2020. This framework provides great advantages in terms of certainty on the level of funding that is likely to be available over time for critical projects like the youth guarantee scheme. There is a good deal for us to learn nationally. Instead of spending all our budget in one year we will be allowed to move it into the following year.

At the same time I wish to exercise a note of caution. I am not necessarily convinced that the collective sense of EU governments along with the Commission has been sufficiently proactive in responding to the dangers of deflation and insufficient demand. Let us consider some of the dialogue at European level. We have heard a flavour of it in both Houses of the Oireachtas. I have been struck by the emphasis on budgetary discipline and the apparent assumption that it was a lack of discipline by governments that has been the cause of the current recession. In reality, it was the collapse of key parts of the private sector that resulted in the previous balanced government budgets going drastically into deficit.

Is enough attention being paid within the EU and among the EU leadership to agreeing indicators on private borrowing, as opposed to government borrowing, and to when it is getting dangerously out of control? What collective action should be taken to moderate that, when necessary? Setting solvency ratios for individual lending institutions under the Basel accords are not sufficient. We need to have a clear systematic view at sectoral level of relevant danger signals as well as the capacity to act on them.

In respect of the capacity to act, I am concerned that the German constitution has been changed to significantly constrain the ability of the German Government to borrow from 2016. We face a major challenge, therefore, in building the collective will at European level to confront our economic challenges as effectively as possible. I do not envy the Government's task and the challenge that this presents. It is important for all of us to build up within the European Union the capacity to act, to build alliances and to persuade others throughout the entire front of action.

The growing level of inequality in the western world and Europe is of concern. This has been raised in the US Congress by President Obama and it has been put to the centre of the agenda. Many people support the deregulation of markets as far as possible on the basis that markets are a force of nature best left to themselves. However, the reality is that markets are social institutions and if they are to work there must be rules to address them. Professor Joseph Stiglitz has referred to the fact that the wealth amassed by the top 1% has been due to their ability to influence how those rules are written.

I will finish by referring to the citizens' Europe and promoting equality. This issue has been raised by several others. There has been a breakdown. It is clear from attitude surveys throughout Europe that support within member states has weakened for the citizens' Europe. We cannot afford to be complacent about this. One of the factors that has been influential in weakening popular identification with Europe - the Minister of State raised this in the context of enlargement and I note he takes a positive attitude towards enlargement - has been the extent and the speed of enlargement that has taken place within the past decade. I am not at all against enlargement. I can see why it is a necessary thing. However, we should be conscious of how our citizens experience it. For example, people in Ireland were once able to name all the members of the European Union but few of them can do so today. It is tempting for the Government and all governments to try to win friends by telling other applicant states that they support their admission to the European Union, but that is not sufficient.

There needs to be a clearer understanding of where Europe begins and ends. The Union must be based on a broad sense of identity, founded on some form of common historical experience, or else it is simply an abstract set of criteria with which people will not identify sufficiently.

Ireland and the world in general needs a healthy and positive EU working cohesively and effectively to build a more prosperous, equal and sustainable future. Much has been achieved, but as has been said on many occasions, a lot remains to be done.