Leaders’ Questions

There is deep concern about the eurozone crisis almost on a daily basis, given recent events. There are significant concerns about Greece and its political uncertainty, Spain and Italy, with bond yields rising again. The markets are reacting negatively in a significant way to these events and confidence is being undermined day by day. There is concern about the adequacy of the firewall and if it will be sufficient to curb this crisis. This has been labelled a great recession, the worst we have experienced since the late 1920s, and the eurozone crisis is turning out to be prolonged, with no sign of abatement any time soon. President Hollande of France will meet Chancellor Merkel of Germany this evening, and that represents an opportunity to try to turn this around.

Does the Taoiseach agree that now is the time for Europe to take radical and urgent action? It should be radical in the sense that the European Central Bank should have the mandate to support growth in all its aspects and not just singularly focus on inflation. European funding, whether through reallocation of structured funds or new funding, must be provided to countries with high debt, a raised risk and elevated unemployment, as a true fiscal Union would envisage. We need a massively expanded European Investment Bank to support infrastructural projects that can increase productivity and create jobs on the ground. Does the Taoiseach accept these radical steps are now urgently required to ensure a restoration of confidence across eurozone countries and that we can once and for all deal decisively with the issues that have hampered Europe's capacity to recover in recent years?

This matter concerns every citizen across Europe today. The ECOFIN meeting clearly focused on the question of Greece and the deepening awareness of the potential for a real challenge in Spain. The Minister for Finance and the Minister for Public Expenditure and Reform met representatives of the European Investment Bank today to discuss flexibility issues. There is a blockage in the system in the case of PPPs and a release is required. AIB is the main funder of that process. This is a time not just for assessment of the challenge but also for imagination and ingenuity about what can be achieved.

From the comments made by Christine Lagarde recently, it is evident that the IMF is actively pursuing a number of options for Spain. There is an understanding that what happened in Ireland should not happen again. That means if a situation was to arise for Spanish banks and an assessment had to be carried out in the immediate future of whether they were solvent or bankrupt, given the size of Spain and its economy, it would have enormous implications. As has been pointed out by the Minister for Finance, in the event of action being taken there, Ireland's interests would be an issue. There is no stomach to allow a second run similar to what happened in Ireland where the sovereign had to borrow from the banks to bail them out and the taxpayer had to pay for it. I note Christine Lagarde's recent comments. This matter concerns everyone. Clearly, the Government will monitor the situation closely. That is why both Ministers are there.

The Deputy is aware that the French President is being sworn in today and that he is to travel to Berlin. We hope there can be clarity on the range of what he is talking about on the growth agenda. On 23 May the focus will be on the first European summit in the context of the growth agenda. Ireland will prepare its own case and contribute to the debate, as appropriate.

The time for monitoring has passed. For the last 12 months I have been calling for many of the measures I have outlined, as have many analysts in Europe and elsewhere. That decisive action is necessary now on a more fundamental level to deal with the crisis. In that context, in every conceivable scenario, the passage of the fiscal treaty is essential. No one disagrees with the need for the balanced fiscal rules as contained in the treaty or to provide for safe and definite access to funding for this country to fund public services in 2014 and 2015. That is essential; we do not need to add to the uncertainty. We do not need to undermine external confidence in the country and thereby undermine potential investment. We do not need the rise in bond yields that a "No" vote would occasion. Ireland should be bringing to the table more urgently the absolute necessity to do something radical and urgent to turn around the story in Europe, with our European colleagues. This involves the mandate of the European Central Bank and also significant transfers to countries with high debt and unemployment levels, as well as significant investment in shovel-ready infrastructural projects. We want a commitment from the Taoiseach and an understanding that that is the Government's position as we enter a crucial two weeks of negotiations. In my estimation, Europe has one month in which to sort this out to prevent something no one wants from happening.

The feeling was that Europe had one year or more to get its act together. Clearly, the indications, concerns and anxiety about the Spanish economy have exacerbated. That is all the more reason, as the Deputy rightly points out, it is absolutely imperative that citizens of this country make a strong, clear and confident statement by voting "Yes" in the referendum on 31 May. That will send a message of stability and confidence, showing that the people know the direction in which they want to head and make no bones about stating this strongly and clearly.

The Government is considering issues of real concern nationally for discussion on 23 May. Being honest, I do not see that meeting as one at which a range of decisions will be taken. There are different views about the ECB, the EIB, the ESM, the adequacy of firewalls and what Europe must do now to turn its face towards the growth agenda. The discussions taking place between President Hollande and Chancellor Merkel will probably give the Franco-German view of the principle of giving belief to that agenda.

While we have stabilised the public finances, consumer confidence has risen for the fourth or fifth month in a row and clearly there are projects that could be considered, there is also the question of Structural Funds. If Greece has €16 billion in Structural Funds that it cannot spend because of the need for the Greek Government to put up money, there must be an understanding of how we might be able to use some of the Structural Funds not being used, without being seen to take them from an individual country to which they were allocated. Ireland has spent its Structural Funds, although we have a range of projects that could be considered. We can discuss this issue again before the meeting on 23 May. A number of issues are being considered by the Government.

The economic difficulties across Europe about which the Taoiseach and Deputy Micheál Martin ring their hands are the direct consequence of austerity, the very policies the Taoiseach wants to put into the treaty. He talks about the Spanish banks but not once when he was in negotiations did he ask for a write-down of the private debt of Irish banks. In fact, he boasted he would never do this. Now he talks about waiting the French President to deliver the growth package that he never even sought in his negotiations on the austerity treaty.

Sinn Féin proposes a three year €13 billion investment package focusing on infrastructure and new enterprises. The money could be sourced from the discretionary portfolio, the National Pensions Reserve Fund, matching funding from the European Investment Bank and an investment by the private pensions sector. It would create 130,000 jobs over three years, potentially save €800 million in social welfare benefits and see a massive increase in revenue receipts. This is the sort of Government-led job retention and creation investment needed. Will the Taoiseach commit to this type of Government-led employment of resources to get people off the dole and stop the awful recurrence of forced emigration? Last year 76,000 emigrated, a total of nine young people every hour since the Government came to power. I was told in Leitrim the other day that half of those aged between 22 and 26 years had left the county. Senior teams cannot field a side; our young people are playing camogie and hurling in Brisbane and Baltimore and their parents are watching to see which child will go next. Will the Taoiseach commit not to rhetoric, playing catch-up with the train that left when he signed up to this bad treaty, but to Government-led investment to get people off the dole and back to work and stop forced emigration?

The Deputy is aware of the Government capital programme which amounts to €17 billion. It includes major infrastructural projects, hospitals, primary care centres, schools and a range of other projects, including the national children's hospital.

Metro North is shovel ready.

It is a €17 billion programme. Deputy Adams is aware the Government has introduced new methods of creating employment for people such as the JobBridge scheme, which has now created in excess of 5,000 places, and the Pathways to Work programme, which allows for people currently on the live register or drawing social welfare to be re-trained, upskilled and to have the opportunity to get into work.

I do not like to see anyone leave the country. No parent does and no one else does either unless people wish to leave by choice, depending on their skills, their requirements for experience or their wish to travel. Unfortunately, emigration is part of everyday life now. This is why, as I stated to Deputy Martin, the relevant Ministers, Deputy Noonan and Deputy Howlin, have been speaking to the European Investment Bank today. There are several areas which need greater flexibility to be shown, and in this regard the Government could avail of new ways of funding infrastructure projects and employment creation opportunities. I have stated to Deputy Adams on many occasions that the Government is overseeing the implementation of more than 200 proposals in respect of small and medium enterprises. It is actively following through on the microfinance agency and the partial loan credit guarantee scheme. The big issue for many businesses is having access to credit from banks in the first place.

The Government is also using and has indicated its preference for the National Pensions Reserve Fund and the setting up of the Irish water company, which will, I hope, create up to 2,000 jobs through the repair of major water conduits and the installation of water meters in due course. The Government has set its plan clearly.

Who is getting that contract?

I did not call you yet, so stay quiet for one moment, please. Thank you.

The discussions that are taking place between the Government and the European Investment Bank and the broader discussions that will take place on 23 May with regard to a growth agenda are all focused as a matter of priority on providing opportunities for employment and getting people back to work. I am sure Deputy Adams shares these sentiments although we might not always agree on the individual realities.

I was in Lucan last night. There were a good number of Sinn Féin supporters there and, in fairness to them, we had a good, vigorous discourse about the fiscal stability treaty. I think they got enough of it last night.

How well the Taoiseach does behind closed doors.

It must have taken Fianna Fáil eight or nine years before the people had enough of them. It has taken the Taoiseach one year before the majority of people have had enough of the policies the Government is pursuing. The Taoiseach stated emigration is, unfortunately, part of everyday life. This is the single failure of this State and of successive Governments. People who themselves emigrated in the 1950s or the 1980s are seeing their children leave. The Taoiseach is bound to have heard the stories and know people who have loved ones and young people away across the world.

The Taoiseach pays lip service to the proposition of Government-led investment but no one really believes him. He is out of his depth dealing with these issues at the European Union summits and he has been so consistently.

We believe Deputy Adams.

He has never raised the issue of jobs and investment at the summits. The treaty which the Taoiseach has signed on for has no social or economic merit to it whatsoever.

Can we have your question please, Deputy?

I asked the Taoiseach to support Sinn Féin's proposals and, naturally, he dodged the issue. Will the Taoiseach tell us in detail whether he has proposals for Government-led investment? Does the Government have the type of projects or the willingness to get the money from the European Investment Bank and to take the money out of the National Pensions Reserve Fund to get our people back to work? I repeat the figure: nine citizens every hour. By the time we have finished Question Time a further 18 young people will have left the State. That is a disgrace and it is a shame on the Taoiseach, his Government and his Labour Party colleagues.

The Taoiseach should remind him of the jobs in Dundalk.

It took a long time to drag out of Deputy Adams some semblance of credit to PayPal for putting 1,000 jobs in his town and constituency. That amounts to a lot of young people, one hopes from that area and other areas, who will be gainfully employed in Deputy Adams's constituency, but he does not have it in him to give credit to the company which made that decision and to IDA Ireland.

I do: well done, Taoiseach.

Deputy Adams does not see the merit of Mylan putting €500 million on the table to employ 500 young people between Dublin and Galway.

He is not even listening.

He sees no validity in this and it must be dragged out of him each time because he wants the country to go backwards. He wants this country to follow his proposal.

Deal with the question. The Government should stop giving our money to the banks.

Deputy Adams should deal with the question.

Deputy Adams said that the EU and the IMF should take their money and leave these shores.

Were we right?

He said the IMF and the EU should go home, leave our shores and leave us in a catastrophe. Deputy Adams has never supported any treaty of the European Union. He wants nothing to do with it because he only wants to face his own party and get it ahead of Fianna Fáil by hook or by crook.

Please answer the question.

I put it to Deputy Adams that the treaty on 31 May is about the future of our country. It is about stopping emigration. Article 1 of the treaty refers to employment, competitiveness and social cohesion. Perhaps Deputy Adams did not read it but Article 1 speaks of social cohesion, competitiveness and employment.

Will the Taoiseach put that in the Constitution?

That is the priority of the Government regardless of whether Deputy Adams likes it. The Deputy's heart is not in this argument because he knows the people, in their pragmatism and wisdom, will pass this treaty because it gives us certainty and confidence for the future. It is from this future the jobs to keep our young people at home will come.

The Government is running scared.

Has Deputy Finian McGrath's time been taken up?

Deputy Boyd Barrett, it is your turn.

(Interruptions).

My heart is very much in the debate about the fiscal treaty. I hope the Taoiseach will answer directly the questions I have for him. At the outset of the referendum campaign, the Taoiseach said the "No" side would raise issues external to the treaty. Exactly the opposite has taken place. The Taoiseach and the Government have discussed everything except what is actually in the treaty, its provisions and the impact it will have on our economy and society. Instead, the Taoiseach has made threats about imposing worse austerity in the next budget, the dire consequences of a "No" vote and the tax policies of the United Left Alliance, although he refuses to discuss any of these in a debate on national television in front of the people.

Will the Taoiseach discuss the treaty? The treaty is about deficit and debt reduction. Will the Taoiseach inform the public and the House about it? What is a structural deficit? What will our structural deficit be in the year when we exit the EU-IMF programme? What cuts will be needed in that year and in following years to meet the treaty targets? What will our national debt be in the year we exit the EU-IMF programme?

We do not have a crystal ball.

What cuts will be required to meet the debt targets in the treaty?

Who will win the Grand National?

What will the impact be on all these forecasts if the Government's current growth projections are too optimistic? How much larger will the cuts be?

(Interruptions).

Most important, who will the Government cut and tax? Will there be more property taxes, water charges, health cuts, special needs cuts, education cuts or more sales of natural resources?

This is coming from the €10 billion man.

The Taoiseach should show us the cuts, tell us who will feel the pain and how much pain they will feel to meet the targets of the fiscal treaty which the Government is promoting.

That is hardly worthy of a response. It is the same old record Deputy Boyd Barrett has had since he came in here.

Answer the question.

Answer the question.

How many supporters turned up to Deputy Higgins's meeting last week? It was four.

I put it to Deputy McGrath that he should listen very carefully to the residents of his constituency. He should listen very carefully to the people who live there because they are wondering which side Deputy Finian McGrath is on.

(Interruptions).

They will be still wondering after the vote.

At least the Deputy is clear that the serial protestor over here has a side, and that is a "No" side, but Deputy McGrath and Deputy Ross, in the leafiest suburbs of Dublin South, would need to make up their minds as to which side they are on.

We will see what is on the table.

(Interruptions).

Deputy Boyd Barrett made an allegation that I said the "No" side would raise matters external to the treaty. The bank debt is not the consideration of this treaty.

I said "national debt".

The Deputy did raise it. His "No" side has raised it on many occasions, and it is now joined by my erstwhile colleague from the west, Mr. Ganley, in dealing with that. The Deputy also raised the question of corporation tax being in danger and likely to be changed.

Just answer the question.

That is nonsense. People on the "No" side have been raising fears about business and industry here in Ireland.

The Taoiseach does not know. What is the structural deficit?

Deputy Boyd Barrett has said that if the people were to reject this treaty it would require €10 billion extra in taxes. The Deputy might like to point out who his proposition on the "No" side would hurt. He will have to close that deficit in one year. Imagine the catastrophe he will inflict on the Irish economy.

They would love it.

The Deputy is well aware that the structural deficit, which must be taken into account, will remain in the cyclical between growth in the economy and a decline in the economy. He is well aware also that from 2016, Ireland must put forward its plan on our methodology for dealing with that. I have pointed out to the Deputy on many occasions that growth is the key to the future of this country, and I do not accept his charge, the charge of the Socialist group or any of the others who put forward the view that this requires a further €6 billion in taxes and in cuts. That is not the case. When our economy is running with an efficient engine, growth will be the key to dealing with all of that. Rather than the Deputy asking a question as to who will be taxed or who will be cut, I would like to hear his views on what will be the position in 2018 and 2019 when the structural deficit will be the focus of the methodology put forward by the Irish Government to deal with a country specific response to each individual structural deficit because that is what the treaty states.

That was a master class in political deflection of which Bertie Ahern would be proud. The new Teflon Taoiseach has arrived. The Taoiseach's definition of "structural deficit" is extraordinary but I would like him to repeat it to ensure we all understand it.

I would not. I would like a question.

He said the structural deficit was in the cyclical between the growth and the decline of the economy. That is the Taoiseach's definition of "structural deficit", and that is the target we must meet according to this treaty. That is not an explanation.

It is about growth and jobs.

I asked the Taoiseach simple questions because this is on what we are voting, and it is compelling us to meet those targets. What are the targets?

We thought the Deputy knew.

What will the structural deficit be in the year we exit the EU-IMF programme? Going on the Government's figures, what cuts will be required to meet those targets? What will the national debt be in the year we exit the EU-IMF programme? What cuts will be required to meet the debt to GDP ratio targets in that year and in the following year? The Taoiseach has those figures. What will be the impact on those projections and targets if the growth forecasts are off, for example, by 1% or 2%?

The Deputy is way over time. I ask him to co-operate with the Chair.

Will the Taoiseach answer those questions? Who will he cut to meet those targets? Which sections of society will be cut? Will it be the unemployed, workers' incomes, special needs or the vulnerable in society? Who will the Taoiseach cut? Will he answer the question?

I have already pointed out that the projection for growth this year is 0.7%, and for next year it is 2%, but the structural deficit as measured by the methodology used by the European Commission can change. To illustrate that point, the estimated structural deficit for 2015, as measured by the EU Commission's methodology in April 2011, was 4.6% but in April of this year the estimate was reduced to 3.5% because of a combination of factors including Government policies such as the Action Plan for Jobs 2012, Pathways to Work and pension reforms. Growth is the key to doing the heavy lifting in so far as the structural deficit is concerned, which refers to the numbers of people unemployed through that cycle. The position is that when we have our deficit reduced to 3% by 2015, the period after that is when the methodology adopted by the Irish Government, as distinct from the European Commission's methodology, will be used to determine the structural deficit plan. It will be worked out in accordance with the treaty's recommendation that each country has a specific plan, and that is what we will follow.

The Taoiseach did not answer the questions.

Far from the Deputy's catastrophic prediction of a further €10 billion in cuts in one year, which would drive this country over the edge, the people voting "Yes" on 31 May will give a clear signal about our country's intention of continuing to proceed in the right direction where we can have the growth to provide employment and opportunity to keep our young people at home if that is what they wish to do.

The Taoiseach will not give us the figures on the cuts.

This is not an easy challenge but it will deal with Deputy Adams's concern about forced emigration.