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Dáil Éireann debate -
Tuesday, 16 Oct 2012

Vol. 778 No. 3

Ceisteanna - Questions (Resumed)

Official Engagements

Micheál Martin

Question:

1. Deputy Micheál Martin asked the Taoiseach if he has been in contact with Prime Minister Rajoy regarding developments in Spain; and if he will make a statement on the matter. [40046/12]

Micheál Martin

Question:

2. Deputy Micheál Martin asked the Taoiseach if he will provide an update on arrangements made since he last reported to Dáil Éireann on the matter of bilateral meetings with other European leaders. [40253/12]

Micheál Martin

Question:

3. Deputy Micheál Martin asked the Taoiseach if he has circulated any documents to members of the European Council since 1 July 2012. [40254/12]

Micheál Martin

Question:

4. Deputy Micheál Martin asked the Taoiseach the duration of each of his bilateral discussions with other leaders at the Olympic games insofar as those discussions related to Irish priorities within the European Union. [40256/12]

Micheál Martin

Question:

5. Deputy Micheál Martin asked the Taoiseach if he will provide an update on the administrative arrangements in place within his Department relating to the management and coordination of European issues. [40259/12]

Micheál Martin

Question:

6. Deputy Micheál Martin asked the Taoiseach the contacts which he had with President Barroso during the period 1 July to 18 September 2012. [40262/12]

Richard Boyd Barrett

Question:

7. Deputy Richard Boyd Barrett asked the Taoiseach the issues he intends to put on the agenda for the European Summit in Brussels on 18-19 October; and if he will make a statement on the matter. [40446/12]

Richard Boyd Barrett

Question:

8. Deputy Richard Boyd Barrett asked the Taoiseach the issues he intends to raise with French President Hollande at their forthcoming meeting; and if he will make a statement on the matter. [40447/12]

Richard Boyd Barrett

Question:

9. Deputy Richard Boyd Barrett asked the Taoiseach if he intends to raise issues of debt relief for Ireland at the forthcoming European Summit in Brussels on 18-19 October; and if he will make a statement on the matter. [40448/12]

Richard Boyd Barrett

Question:

10. Deputy Richard Boyd Barrett asked the Taoiseach if he intends to raise the issue of jobs and growth at the forthcoming European Summit in Brussels on 18-19 October; and if he will make a statement on the matter. [40449/12]

Micheál Martin

Question:

11. Deputy Micheál Martin asked the Taoiseach if he will outline his responsibility in relation to the EU 2020 strategy, its creation of employment and inclusive growth; the actions that have been taken; and if he will make a statement on the matter. [41261/12]

Gerry Adams

Question:

12. Deputy Gerry Adams asked the Taoiseach if he will report on discussions he held with the Italian Prime Minister Mario Monti on 21 September 2012. [41268/12]

Gerry Adams

Question:

13. Deputy Gerry Adams asked the Taoiseach the issues he plans to place on the agenda for the European Council meeting in Brussels on 18-19 October 2012. [41489/12]

Gerry Adams

Question:

14. Deputy Gerry Adams asked the Taoiseach if he will circulate any position papers to other European leaders in advance of the European Council summit meeting in October 2012. [41490/12]

Richard Boyd Barrett

Question:

15. Deputy Richard Boyd Barrett asked the Taoiseach if he will report on the discussions he had with Italian Prime Minister Mario Monti in Rome on 21 September 2012; and if he will make a statement on the matter. [41633/12]

Richard Boyd Barrett

Question:

16. Deputy Richard Boyd Barrett asked the Taoiseach if he will discuss the recent anti-austerity demonstrations and protests in Spain with Spanish Prime Minister Mariano Rajoy at the upcoming European Council meeting on 18 and 19 October 2012; and if he will make a statement on the matter. [41636/12]

Richard Boyd Barrett

Question:

17. Deputy Richard Boyd Barrett asked the Taoiseach if he raised the issue of debt relief for Ireland and the wider debt crisis in Europe at his various meetings in Brussels on 3 October; and if he will make a statement on the matter. [43088/12]

Richard Boyd Barrett

Question:

18. Deputy Richard Boyd Barrett asked the Taoiseach the issues he raised in the one to one meetings with Jose Manuel Barroso and Herman Van Rompuy in Brussels on 3 October; and if he will make a statement on the matter. [43089/12]

Micheál Martin

Question:

19. Deputy Micheál Martin asked the Taoiseach if he has spoken to any of the Prime Ministers of Finland, Germany or the Netherlands since the joint statement by their Finance Ministers on Tuesday 26 September 2012; and if he will make a statement on the matter. [42649/12]

Micheál Martin

Question:

20. Deputy Micheál Martin asked the Taoiseach his plans to visit any of the European member state capitals between now and the end of 2012; and if he will make a statement on the matter. [42650/12]

Joe Higgins

Question:

21. Deputy Joe Higgins asked the Taoiseach if he will report back on his meetings with the European Commission chief José Manuel Barroso and with European Council President Herman Van Rompuy. [43024/12]

Joe Higgins

Question:

22. Deputy Joe Higgins asked the Taoiseach the European leaders with whom he has had discussions recently; and if he will make a statement on the matter. [43027/12]

Micheál Martin

Question:

23. Deputy Micheál Martin asked the Taoiseach if he will provide an update on his contacts with other European leaders since he last reported on the matter to Dáil Éireann. [44233/12]

Micheál Martin

Question:

24. Deputy Micheál Martin asked the Taoiseach if he will provide an update on any documents he has circulated to other European leaders since he last reported on the matter to Dáil Éireann. [44234/12]

Micheál Martin

Question:

25. Deputy Micheál Martin asked the Taoiseach the issues that were discussed and the responses that were given at his meeting with President Barroso recently; and if he will make a statement on the matter. [44242/12]

Micheál Martin

Question:

26. Deputy Micheál Martin asked the Taoiseach the issues that he hopes to prioritise at the next EU Council meeting; and if he will make a statement on the matter. [44243/12]

I propose to take Questions Nos. 1 to 26, inclusive, together.

I wish to emphasise again for the House that I am in regular and ongoing contact with my European Council colleagues and I avail of every opportunity to engage bilaterally with them. While in Rome on 21 September, I met with Prime Ministers Mario Monti, Mariano Rajoy and Antonis Samaras. At all of these meetings the primary focus was on developments in the euro area. I updated all three leaders on economic developments here, including our efforts to secure progress on making our banking debt more sustainable. The question of the Union's future budget, the multi-annual financial framework, MFF, also arose.

In my meeting with Prime Minister Monti we also considered the issues expected to arise at the forthcoming meeting of the European Council, including President Van Rompuy's work on strengthening economic and monetary union. We briefed each other on economic developments and stressed our shared commitment to driving the jobs and growth agenda forward. We also looked forward to Ireland's Presidency of the European Union in the first half of next year.

In my meeting with Prime Minister Rajoy, the Prime Minister updated me on developments in Spain, especially in its banking sector. As the House will be aware, a report on the recapitalisation needs of Spanish banks has since been published. Likewise, I updated Prime Minister Rajoy on developments here and on our efforts to ensure that the commitments made at the euro summit in June are honoured in full. This is very much a shared agenda.

Prime Minister Samaras updated me on the efforts his government is making to meet the requirements of its second programme. The situation in Greece remains extremely difficult and I wished him every success in his efforts to reach a positive outcome in ongoing discussions with the troika.

Together with our colleagues in the Government, the Tánaiste and I travelled to Brussels on 3 October for pre-Presidency meetings with the College of Commissioners. Discussions covered the full range of policy matters likely to be on the agenda during our term in office. I highlighted that the key issues for us will be jobs and growth, as well as stability of the euro. I had one-on-one meetings with the President of the Commission, Jose Manuel Barroso, and with the President of the European Council, Herman Van Rompuy. In both meetings, I took the opportunity to provide an update on economic developments here and to stress the importance of the question of banking-related debt for us.

My meeting with President Barroso was very much focussed on plans and priorities for our Presidency. Issues that arose in this regard included jobs and growth, the Single Market, including in the digital area, and trade. We both stressed our commitment to ensuring a constructive and collaborative relationship between the Commission and the Council during our term. We both also expressed hope that an agreement can be found on the Union's future budget, the multi-annual financial framework, at the meeting of the European Council in November, allowing us to focus on implementation of the agreement during our term. We further discussed the wider economic agenda confronting the Union, including the need to make the most of the tools we already have available to us to drive the reform process forward. I said that overseeing the next round of the European semester would be an important issue for us as Presidency.

The semester is part of the Europe 2020 reform process in the European Union. This aims at securing smart, sustainable and inclusive growth. The European Council is playing a central role in driving this work forward, and we reinforced our commitment to Europe 2020 in the compact for growth and jobs agreed in June. I also took the opportunity to thank President Barroso for the supportive role the Commission, especially Commissioner Olli Rehn, has played as a member of the troika, including in its support for an agreement on our banking debt.

The European Council agenda in the months ahead was the focus of discussions in my meeting with President Van Rompuy. This included his ongoing work on strengthening economic and monetary union; efforts to stabilise the eurozone, including through urgent implementation of the euro summit statement agreed on 29 June; and progress on banking union. We also considered prospects for agreement on the MFF.

In its meeting later this week, the European Council will review progress in the implementation of the compact for growth and jobs; receive President Van Rompuy's interim report on strengthening economic and monetary union; assess progress made on proposals on a single European banking supervisory mechanism, and examine the wider issue of banking union; have an exchange of views on relations with strategic partners, including China; and address specific foreign policy issues, most likely including the situation in Syria. As I will be making a statement to the House on this week's European Council later today, I will not go into detail on our priorities. However, I intend to engage positively with colleagues on each of the issues on the agenda to ensure the best possible outcome for Ireland.

I met with the President of the European Parliament, Martin Schulz, during his visit to Dublin on 4 October. As in my other meetings, we discussed our plans and priorities for our Presidency.

I expressed my support and respect for the enhanced role being played by the Parliament since the entry into force of the Lisbon treaty and we agreed the importance of working closely and co-operatively together. We also considered the wider European agenda, including economic issues and the multi-annual financial framework.

It is my intention to travel to Paris later this month for a bilateral meeting with President Hollande, and to Berlin in November for a meeting with Chancellor Merkel. While I have no formal plans to meet Prime Minister Katainen of Finland or Prime Minister Rutte of the Netherlands, I will of course see them and all my European Council colleagues at the European Council meeting on Thursday and Friday. A series of further bilateral meetings is planned before Ireland assumes the Presidency of the European Council next January. EU issues were not the primary focus of my bilateral discussions at the Olympic Games in London.

On the question of our banking related debt, at the June summit meeting, Heads of State and Government committed to examine the situation of the Irish financial sector with a view to improving further the sustainability of our well-performing adjustment programme. That commitment stands. In the period since, along with the Tánaiste and the Minister for Finance, I have taken every appropriate opportunity to highlight to our European partners the importance of the issue for Ireland and to seek their support in ensuring the commitment made in June is honoured. Discussions on the matter are ongoing, and it would not be appropriate for me to enter into detail here. However, the House can be fully assured that our aim remains to secure the best possible deal for Ireland. I have not circulated any documents to members of the European Council since 1 July 2012, but the Government is, of course, feeding into the usual preparatory work for the European Council meeting this week, including through the discussion with President Van Rompuy at today's meeting of the General Affairs Council.

A new integrated European affairs division was established within my Department last year. This involved the transfer of staff from the Department of Foreign Affairs and Trade who now work alongside staff who were already working in my Department. The new integrated EU affairs and co-ordination division supports me in my membership of the European Council, as well as supporting the Tánaiste in his responsibility for overall co-ordination of European policy, including his membership of the General Affairs Council. The division also provides support to the Minister of State with responsibility for European affairs. It secures more effective strategic direction and co-ordination across the whole of Government in all matters related to the European Union and is working intensively in preparation for our Presidency next year.

I have tabled 13 questions in this bundle, so I would appreciate the latitude of the Ceann Comhairle.

I will let the Deputy contribute again later.

The Taoiseach did not specifically answer Question No. 19, to ask the Taoiseach if he has spoken to any of the Prime Ministers of Finland, Germany or the Netherlands since the joint statement by their Finance Ministers on Tuesday, 26 September 2012, and if he will make a statement on the matter.

The Taoiseach should have put in his reply that he did not speak to them specifically. That is the key point of all the questions I have asked. Three weeks ago, those Ministers for Finance made a significant statement about their understanding of the June deal on the separation of Government debt from bank debt. It is incredible the Taoiseach has not held any discussions or contacted their leaders on the Irish position and the Irish response to that statement and that he did not take the opportunity to contact them by phone or arrange a meeting with them to make the Irish position crystal clear and have genuine dialogue at Head of State level, which is the only route to resolve the clear differences of interpretation that have emerged since the June meeting.

It is also an incredible admission by the Taoiseach that he has not circulated any detailed material to other leaders since June. Of course our interests will be ignored by other countries if we leave them alone and do not follow up on decisions taken by the European summit and by the leaders of Europe, and if we sit back and let the entire summer pass without any action on our part to pursue our agenda.

Given the Taoiseach has held no discussions with their leaders, before or after the June summit, and certainly since the statement was made three weeks ago, how does he know the understanding of the Prime Ministers of those three countries of the June deal? Is the Taoiseach satisfied the Prime Ministers of Holland, Finland and Germany share the same understanding of the June decision as him? Can he explain how he knows their understanding of the deal?

The statement by the three Ministers for Finance is just that - a statement by three, albeit influential, Ministers. The Irish Government was in touch immediately with the offices in the Netherlands, Finland and Berlin and the situation was that was a statement made by the three Ministers without reference to the Prime Ministers of the three countries involved. Departmental officials from the Department of Finance and the Department of the Taoiseach were immediately in contact and on a number of occasions since. The European Commission, the following day, was very clear in its statement of support for the position adopted on 29 June, as was Mr. Draghi of the European Central Bank and Mr. Martin Schulz, President of the European Parliament, and a range of other leaders.

The statement was a statement from the three Ministers for Finance, but it has no bearing on the decision of the 27 Heads of Government on 29 June that the link between sovereign and bank debt should be broken. That is the decision that was made, that is the decision that stands and that is the decision that must be implemented. Clearly, within that decision was a specific reference to a review of the debt sustainability of this country and that Ireland would receive similar and fair treatment in respect of deals for any other countries.

Clearly, in respect of the banking union, it is necessary for recapitalisation of the banks that it be set up. The first meeting of the ESM has taken place and the Commission has lodged its proposal for banking union. When I attend the meeting on Thursday and Friday, I will make that point very strongly. It is imperative for the citizens of the countries of the European Union that the decisions taken by the highest governing body of the Union, the 27 Heads of Government, be followed through and be seen to be followed through. That is an issue on which the Minister for Finance and officials from all Departments have been working diligently over the past period in addition to ongoing discussions on the legacy position as far as the promissory note is concerned.

Just because three Ministers for Finance of individual countries make a statement, it does not mean I must contact each of the Heads of Government. It was confirmed clearly to Ireland that the statement was not carrying the imprimatur of the governments of these countries. I intend to meet the German Minister for Finance when he visits Ireland shortly. The Minister for Finance has met him, along with other colleagues, in Paris, Rome, Berlin, as well as in Cyprus, to discuss these matters, and politically they are aware of the decision of 29 June and the importance of implementing it. I hope the meeting on Thursday and Friday can make good progress in this matter.

I agree it is imperative decisions be followed up. It is the lack of follow through on the part of the Taoiseach that baffles me. It is incredible he did not feel the need to ring the leaders concerned at the very minimum. This was no ordinary statement. It was a serious and profound statement by three senior Ministers for Finance from three very important countries whose interpretation of the June summit meeting decision is in contrast with our interpretation of it and the interpretation the Taoiseach spun at the time.

At the very least the leaders concerned should have been contacted.

The Taoiseach has made strong statements since but to a home audience. He stamped his foot at the Burlington Hotel and said this is not on and that the deal must be followed through. He did the same at the convention centre on Thursday at the Dublin Chamber of Commerce dinner. I respectfully put it to the Taoiseach that there is not much value in speaking to a home audience in the Burlington Hotel on this issue, it is to the capitals concerned that the strong statements need to be made. Statements of this importance should be nipped in the bud and clear markers should be put down by communicating with the leaders of those countries. How does the Taoiseach know that the statement was made without reference to the prime ministers? He did not ask them that question, he is surmising that. Why is it left to officials all the time?

When elected Taoiseach, Deputy Kenny waited longer than any of his predecessors to hold a direct meeting with a European colleague and since then he has continued the policy of reducing bilaterals to a minimum. What is behind this hands-off policy? Why did the Taoiseach not telephone the leaders concerned in the aftermath of what any objective assessment would consider to be a significant statement on the separation of bank debt from Government debt, the legacy issue and so forth, which has implications not only for Ireland but other countries as well? What is clear from all his replies today is a sense of lack of engagement with those key countries who have raised doubts and have given a completely different perspective and a different interpretation of the decision in June. Why did the Taoiseach not telephone them? At any stage at which he has spoken to the other leaders, has he ever raised the issue of the non-secured non-guaranteed banking debt?

The Government of which the Deputy was a member has much to answer for in that regard. The Deputy seems to think that I should spend my time telephoning other leaders or travelling around because he says so. I am interested in results. A process has continued for quite some time, which I have outlined previously. The day after I was elected as Taoiseach and went to my first Council meeting I was asked by a number of leaders to reduce Ireland's corporation tax rate and I refused.

That was never on.

Deputy Martin, please allow the Taoiseach to respond.

The Deputy could easily have asked why I did not telephone them and mention this issue. The point is there was not going to be an interest rate reduction, a temporary bail-out mechanism, a permanent bail-out mechanism, a second bail-out for Greece, or the realisation of direct recapitalisation of banks by breaking the link between sovereign and bank debt. As the Deputy is aware those things do not happen just like that, there is a process that has to be gone through involving much detailed interaction with officials on all sides, but it is the leaders who have the responsibility to make the decision. The decision of 29 June was clear. I made that point to President Barroso when I met him but it is not the function of the Commission to implement it. However, the European Council which is chaired by President van Rompuy has to be seen to implement it. Clearly the decision of 29 June refers to a situation in Ireland which is a legacy debt involving issues that happened in the past. The decision of 29 June was not put in place to bail out a given country in ten years time; it was to break the link between sovereign and banks in order that banks could be recapitalised directly under a banking union with a supervisory role. In the case of this country, named specifically, it was not because a bailout might be required at some future date, it is because of the legacy issue that arose here and so far as my contribution is concerned, I want others to understand the crushing burden placed upon the backs of taxpayers by the incompetence of the party in Government of which the Deputy is a member.

That is not the case. That is not true and the Taoiseach knows that.

That is the legacy. As I said previously in respect of the FOI request about the guarantees, the Deputy when in Government had all the information - faxes, e-mails and everything else, all of which were meaningless. There is no evidence in my Department of what was said when the biggest decision ever was made. As the Deputy is aware, person after person of great influence has said this was a disastrous deal - the so called cheapest bailout in the world.

Will the Taoiseach please answer my question?

I have answered the Deputy's question.

Why did not the Taoiseach telephone the leaders?

Ms Lagarde from the IMF, Mr. Draghi, the commissioners, President van Rompuy, President Barroso, President Schulz, leader after leader-----

I asked about the leaders in Question No. 19.

I am not speaking here to a local audience. It was in the convention centre and not the Burlington Hotel.

The Taoiseach is fillibustering.

We have had 23 minutes on this question.

On a point of information, it was in the convention centre and not the Burlington Hotel. It is results that count and not telephone calls. There is a process by which the leaders arrive at decisions that impact on us. The big decision that has to be implemented is that of 29 June, breaking the link between sovereign and bank; that is what will benefit Ireland. I assure the Deputy I will raise the issue directly on Thursday and Friday because that is the decision that stands, that is the decision that was made and signed off on by 27 leaders of the European Union. It is why it is imperative that the people of the European Union see that the decisions made by leaders are signed off and implemented. Failure to do so-----

Has the Taoiseach spoken to the Finnish Prime Minister?

The Deputy asked a question and I will answer it. Failure to do so causes frustration and anger and cynicism which we have seen on the streets of other countries. For our part, I will be very happy indeed to make this case very strongly in addition to the constant negotiations by the Minister for Finance and on a daily basis by officials from the Departments of Finance, the Taoiseach and Foreign Affairs and Trade. The process in Europe involves a great deal of that interaction. The leaders having made the decision, it is a case of seeing it is implemented. That is where our focus lies. I will articulate that very strongly when I attend the meeting on Thursday and Friday.

At this stage I am not sure whether the Taoiseach is being humiliated by the powers that be in the European Union or if he is playing some grand trick on the people with promises of debt relief and also some relief on the crippling burden imposed by the European Union in order to protect the bankers and bondholders when he knows well we are getting nothing. Whatever the truth of the matter, the people are being humiliated and crushed with the austerity that the European Union demands in order to protect the bankers and bondholders. It is insisting that they are protected at all costs regardless of the consequences for ordinary people, vulnerable sectors, workers, the unemployed, the disabled and the young. All of those things matter not a jot to the European Union so long as the bankers are paid back.

All of that might be excused if there was some sign that it was working. We have heard from virtually every official source in the past week or two that what we have been saying on this side of the House for the past two years is right, that the impact of cuts and austerity will not help the economy recover but is doing critical damage to the economy and the European economy.

The latest announcement was on the British economy. Its equivalent of the fiscal advisory council advised that its predictions for growth in the British economy and for the impact of austerity on Britain's economy have been exactly 100% wrong, just as the fiscal advisory council and the IMF have admitted that their predictions of the impact of austerity on this economy have been 100% wrong, which is precisely what we have been saying for the past two years.

The Taoiseach can rubbish us as he does - it seems to be his standard tactic to rubbish the criticisms of the left. Is he now saying that the IMF, the Office for Budget Responsibility in Britain and the fiscal advisory council are wrong in saying that the impact of austerity over the past two years has been much worse - by a margin of 100% - than the Taoiseach told this House and the public it would be? At what point will he admit he and powers that be in Europe were wrong, and that the prescription to help the economy of Europe, including this country, to recover has turned out not to be medicine but poison that is destroying our prospects for economic growth?

When will he take that message to Europe? When will he stand up and be counted, and side with the ordinary people, who are taking to the streets in Europe, saying that this is wrong, not working and is the road to disaster? Is there any point on the trajectory towards economic depression when the Taoiseach will finally put up his hands and admit this is not working and that we need an alternative strategy? Is it that despite the crocodile tears he sheds, secretly the Taoiseach, along with the Chancellor Merkel, is fully behind imposing austerity onto ordinary people because the real agenda is not to help the European economy recover or get debt relief but to asset strip countries, such as this, of its health service, education, natural resources, oil and forests, as is being done in Greece, Portugal and Spain? That is what is happening. Behind all the rhetoric and all the fine words at European Council meetings and in this Chamber, what is happening on the ground for ordinary people is a series of cuts and privatisation.

The Deputy should allow the Taoiseach to answer some of his supplementary questions.

When will he admit the truth and stand up in Europe to defend the interests of ordinary people in this country?

The Deputy should look at the export figures. He does not have a clue.

We take every opportunity to engage with our European colleagues about the improving conditions - albeit challenging - for us in Ireland. The IMF report the Deputy mentioned specifically mentioned Ireland as one of the few countries with an improving growth rate of 1.4%. The fiscal advisory council recommended that more challenging decisions be made to reach our deficit target at an earlier date. The Government has set out its programme. We have a memorandum of understanding with the troika, which funds us on an emergency basis. That memorandum of understanding has been changed through negotiation and a sense of trust between the two Ministers and the troika to good effect. Examples include the change in the minimum wage; the removal of more than 300,000 people from liability for the universal social charge; the opportunity to reduce VAT rates in the hospitality sector and thereby create 6,000 jobs; the non-raising of income tax, which would be an obstacle to creating jobs; and the continued foreign direct investment. That investment arises because of the stability of the 12.5% corporation tax rate. There have been announcements by organisations such as Paddy Power and the Kerry Group, and others will be made in the future.

I do not accept the Deputy's argument that this is a case of destroying our country. The Deputy should consider what we have done in the past 18 months in the reforms and restructuring the Government has set out to do as part of our programme. It is designed to deal with our public finances at home and to negotiate more favourable terms from a European perspective both in regard to the promissory note legacy, which as the Deputy knows required a payment of €3 billion a year for ten years, and in regard to the major decision made by the 27 Heads of Government to break the link between sovereign debt and bank debt. That was considerable progress made by the European Union and we now need to see it implemented in terms of what it can mean for this country.

Nobody from this side has ever said that this would mean a particular amount on a particular date. What has been pointed out is that we need to get the best deal possible for our taxpayers. We got the agreement of the troika that the proceeds from any State assets the Government decides to sell can be ploughed back into sustainable development, employment and job opportunities. There has been increased economic activity in this city in the past 12 months, with the throughput of so many people and the benefits to the local economy. Things have improved but clearly we still have a long way to go. The time ahead is challenging although the prize is great.

I do not accept the argument the Deputy makes. He comes in and rants and raves with his histrionics and fantasy economics every week. Yesterday in Sligo I witnessed the Croke Park agreement in action. The Department of Social Protection now has staff including people transferred from the HSE and FÁS. Those people, who are unfortunately unemployed and drawing social protection benefits in one way or another, will now have a whole new opportunity to change direction and to have provided for them an opportunity to achieve work. Rather than having the old concept of the dole office as a place where someone goes to get the money and then leaves, a very different process is being put in train here. These people can be encouraged, their experience can be noted and their talent or motivation to better themselves can be given an opportunity to be followed through. Whether it be in a local office or at a European level, the strategy of the Government is the same - to improve the lot of our people, to deal with restructuring and reform so that we can have our public finances put in order and to continue to negotiate with our colleagues in Europe.

This would have been sorted out long ago if Ireland was the only problem. Clearly the Spanish economy has difficulties and that is a much larger economy than ours. The growing interest in Catalonia for independence is a matter of concern to the Spanish Prime Minister. Clearly the economy of Italy is enormous. The economy of Greece and others are challenging. The conclusion of implementing the decision of 29 June has different implications for those countries. The EU Commission has published its paper on banking union. The first element of that is expected to be in place by 1 January - I hope it can be. While Commissioner Rehn felt it might be possible to conclude Ireland's element of this bank sustainability review by the end of October, I always said it is more important to get it right in terms of the maximum benefit for the people than to have it completed by a particular date.

I assure the Deputy that the ongoing discussions and negotiations are intense and complex. I am not one for suggesting we will not get a conclusion here. The big decision has been made. It now needs to be implemented and that is where our focus at leader level will be.

The situation is too serious for the Taoiseach to try to trivialise serious questions and serious debate with talk about fantasy economics. What has not been officially acknowledged by the IMF-----

Can we have a supplementary question, please?

Is it not the case that the IMF has now officially acknowledged that its forecasts were the fantasies? These were the forecasts on which the Government based its policies because the troika demanded it.

The growth which the troika predicted has not materialised because of the crucifying level of austerity imposed on our people and economy. Not only has it not materialised in Ireland, the crippling effect of austerity is now spreading from the core into the centre of Europe, including in the United Kingdom, our biggest trading partner. Regardless of how competitive our export industry is, if people in Europe have less money in their pockets because of the austerity being imposed on them, our ability to export our way out of this crisis will be choked off. This is precisely the reason the forecasts are being downgraded, which throws everything off. That is a fact. I am not the only person saying this, as the Taoiseach knows.

I must ask the Deputy to put a question.

Despite this, the Government proposes to continue with the same austerity. The Taoiseach is living in fantasy land in terms of his speaking about investment in jobs when there are 33,000 fewer jobs than last year in the economy, there is less overall investment than there was a few years ago and ordinary people are being hammered, with their living standards and purchasing power, along with the domestic economy, declining.

Will the Taoiseach now admit what the IMF, the chief architects of this austerity, has admitted, namely, that austerity is not working, that we need an alternative path and that the myth that this level of austerity and growth were compatible, as peddled by the Taoiseach and IMF, is not correct? It is not possible to cut one's way out of a recession. That is official. It is not only the left but the mainstream parties who are saying this now. If this is the case, the Taoiseach needs to stand up and fight rather than meekly submit to the demand that we suffocate under debt and austerity. He needs to say that we will no longer do this because it is killing us, which means as of next year, we will have a primary surplus in this country, with the deficit being all interest on debt. That is the card we must play.

The Deputy cannot make a speech now. He must ask a question.

The Taoiseach should tell them that if they do not write down the debt, which was incurred by speculators and imposed on the people of Ireland, we will not pay them next year, that we will give them until that time to write down the debt and that, otherwise, we will no longer play ball, thus standing up and defending the interests of Irish citizens and working people.

Who will pay the nurses then?

I am sure Deputy Boyd Barrett has taken into account that if we issue such threats gardaí, teachers, nurses and workers in his constituency will not be paid in the meantime.

I said we would have a primary surplus as of next year.

Deputy Boyd Barrett would not know a good day if he saw one. The Kerry Group has invested €100 million in the construction of a world class innovation and research centre on 28 acres in Naas, County Kildare, which will act as an international magnet for people from all over the world to come and invest here. Does the Deputy not recognise that?

That is positive, of course.

Some 1,000 jobs will be created for young Irish people with skills and proficiencies in a range of areas. The Deputy does not want to recognise that. The Kerry Group is an Irish indigenous company with a global reach, which has made a decision based on confidence in our people and country. The Deputy cannot see that.

I had the opportunity to open the new facility in Clonskeagh for Paddy Power, which proposes to take on 600 new staff in addition to the already 2,500 people employed by it.

Please, Deputy Boyd Barrett.

That is an example of another Irish company making a decision based on confidence in our country and people, in terms of it putting its money where its mouth is. Does the Deputy consider the decision made yesterday by Stiefel in Sligo to retain 120 jobs by way of a €10 million injection from Government another example of confidence in our people? Does he recognise the announcement made this morning by the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, as a further example of confidence in our people? Does he further recognise that many small and medium enterprises are currently in the process of taking on new staff, many of whom are young graduates of the JobBridge scheme, participation in which has exceeded 6,000? The Deputy does not want there to be any confidence in the economy.

I have never heard the Deputy, during his time as a Member of this House, utter one word which would instil confidence in the people. All he offers is negativity, disillusionment and despair.

I do not know what goes on in the Deputy's head.

He is dysfunctional.

Deputy Boyd Barrett does not know what is an optimistic version of anyone's life. It is no wonder people listening to him become downtrodden and disillusioned. His philosophy is that everything is Third World and nothing can arise from the dust and ashes of despair which he puts out. The Deputy should be ashamed of himself.

I do not believe I am the one with whom they are disillusioned.

Every day I come across people in the-----

It is my fault now rather than that of Fianna Fáil or the Government.

-----small and medium enterprise sector, in which some 250,000 jobs were lost prior to this Government taking office, who say that because of the floor we have put in the sector is starting to move in the right direction, despite that the road ahead is challenging. The Deputy does not want to recognise that because he does not want people to be employed. He wants them on the streets, as is evident from the leaflets he sends out all over the country every week calling on people to contact Deputy Richard Boyd Barrett and join the protest. The Deputy's philosophy is "let's make noise".

They are happening weekly in Galway.

Will the Deputy be joining the protest?

It is about time the Deputy spoke to people who create employment and are thinking of new opportunities for people in their areas, including the Deputy's constituency. I do not accept the Deputy's argument. As I said to Deputy Martin, what counts are results. We are negotiating a big decision, the result of which it is hoped will be of benefit to Ireland. I cannot in all honesty give the date it will be concluded but we will work hard to ensure it becomes a reality as soon as possible.

One of my questions was what issues the Taoiseach planned to place on the agenda for the European Council meeting, which I do not believe he answered. Another question was if he intends to circulate any position papers to other European leaders, to which if I recall it correctly, the Taoiseach replied "No". That is disappointing.

The Taoiseach has a point when he says just because a Minister for Finance makes a statement does not mean he has to get in touch with the prime minister of the state in question. I would like to explore the issue of banking debt with the Taoiseach. In this case, the so-called Helsinki Three, namely, the Ministers for Finance in Germany, Finland and the Netherlands, contradicted the Irish Government's version of the deal done in relation to Irish bank debt. I do not understand why in that case the Taoiseach did not contact their leaders for an explanation or, from his point of view, reassurance that his interpretation of the deal was the correct one. The Taoiseach's interpretation, following his return to this House after the European Council meeting, was that it was a seismic shift. The Tánaiste described it as "a game changer". The Taoiseach told this House and the people that this deal would lift the burden of bank debt from them and that it was to be retrospective. This has been contradicted by the three Ministers for Finance mentioned.

The new chief of the ESM when asked about this last week said: "This part has not been discussed by any European bodies." This interpretation also contradicts that of the Government. Following the June summit, Sinn Féin warned against over-selling the implications of the agreement. I think the Taoiseach was very hard on Deputy Boyd Barrett. His opinions are as valid as anybody else. If the Government secures a deal to lift the banking debt from the people, I will welcome it. Sinn Féin is on record welcoming all the positive developments announced this week. When the Government does something which we believe is good, we welcome it. That is first class for everybody. However, when it is not doing what it is supposed to do, we disagree with it. The Taoiseach must accept this is a valid position.

The Taoiseach said the Government has long argued for the separation of bank and sovereign debt. That is not the case. Sinn Féin argued from the first day for separation of bank and sovereign debt, which the Taoiseach rubbished.

He stated Ireland would pay its way and that we would not have the word "defaulter" stamped on our foreheads. He argued against us every time we raised it. It was only when the new French President was elected and took up the same position as us that the Taoiseach began to U-turn on the issue. It is little wonder the Taoiseach has not resolved this issue. The proof of the pudding is in the eating. The Government continues to pay out, with another €1 billion being paid this month. Will the Taoiseach set out the strategy to remove the burden of bad debt from our people? Is the issue even on the agenda for this week's summit meeting?

Deputy Boyd Barrett is grateful for the Deputy's consideration with regard to the attack he came under there.

I apologise for interrupting the Taoiseach but I ask Deputies to switch off their mobile phones or else leave the Chamber. They are not allowed in the Chamber. There is a sign outside about telephones and I ask Deputies to respect it.

I will lay out some of the groundwork for Deputy Adams during the pre-Council discussion we will have later. I spoke directly to President Van Rompuy. It is fundamental that decisions made by Heads of Government are followed through. The decision was not made by the German, Dutch or Finnish Ministers for Finance. The decision was made by the 27 Prime Ministers, and the Chancellor of Germany and the Prime Ministers of Finland and the Netherlands were party to the decision. The decision, which was very clear, was to break the link between sovereign and bank debt and to look at Ireland's improving position in the context of its debt sustainability.

The implication of the decision was that banks could be recapitalised directly through the ESM. The ESM has had its first board meeting and for this to happen, a banking union with a supervisory role must commence its work and the intention was that this should happen by 1 January. Of course there are divisions on whether it will cover all 6,000 banks in the first instance or have responsibility for the major banks. I remind the Deputy that it was not a major bank which caused the problem here which has required €64 billion to be pumped into the banking system.

In the context of the confusion, concern and anxiety in Europe, it is of critical importance that European leaders revisit the decision made on 29 June and examine what has happened since that can now be progressed by the leadership of the 27 member states to follow through on the decision made and see it is implemented. The ESM has held a meeting and the Commission has launched a paper on banking union. Implementing the decision will have a benefit for the country, the scale of which we do not yet know because it must be finally decided. We will look for the maximum benefit possible for our people and country.

The decision was made at the highest level of European governance comprising the leaders of the 27 member states. I look forward to participating in the debate on Thursday and Friday on behalf of the Government with the other 26 Heads of Government, and building on the negotiations that have already taken place. I will articulate this very strongly. This discussion will happen and it is on the agenda. I made it perfectly clear to President Van Rompuy that I will raise this matter and that I regard the decision as clearly including Ireland's position of legacy debt. The decision made on 29 June reflects this. I cannot speak for the Spanish Prime Minister on what is happening today with regard to the Spanish position, but for direct recapitalisation to take place the banking supervisory capacity must be put in place.

I referred to it being a seismic shift because it had never been done before at European level and there were those who said it could never happen. Deputy Adams stated the IMF and the ECB should get lost and get out of here. The people in his constituency would then not receive their payments and neither would the country. We have funding arrangements, unfortunately, with the troika of the IMF, ECB and the Commission and this will continue as long as we continue to meet our requirements and make our way towards exiting the bailout programme. We hope to be the first country that can do so, and our colleagues in Europe can help us in this regard by implementing the decision of 29 June. Separate from this, as the Deputy is aware, the Minister for Finance and officials are continually working on the question of the difficulties our people face because of the promissory note which we inherited and which requires a €30,000 million payment over ten years. This is a complex matter which is under discussion.

We will have a discussion after this on the European Council meeting, but central to my participation on Thursday and Friday will be the discussion on following through on the decision already made. It is not as if we have to make the decision; it is done and signed. Let us see that the 27 member states follow it through and implement it. For our part, when it becomes apparent we will see what benefits can accrue for the country.

I am very pleased the issue is on the agenda and this is to be commended. If I understand the Taoiseach properly, he stated the leaders of the European Union have signed up to deal with the banking debt including our legacy debt. If this is his interpretation of it, what we need is delivery of the agreement. In his reply the Taoiseach spoke about the implications of this, which is a slightly different issue to the clarity with which he described this as being about dealing with Irish legacy debt. I wish the Taoiseach well in all of this, do not get me wrong. I am sure the Taoiseach wants to see the IMF out of here. We all do. We are in agreement on different points of our objectives. It is how we achieve it and go about it which are the big issues.

The Taoiseach has been contradicted, and his interpretation of the agreement has been contradicted by others, and it looks like the summit will be a fairly fractious affair. There is talk about there being no agreement between the Greek government and the EU and IMF on cuts in that state. Finland is expressing grave concern about new budget proposals. I do not have the time to go through all of the issues which are features of the media coverage. Here is the rub. Between them, the present and previous Governments borrowed €67 billion and gave €64 billion to the banks, including to one bank which is closed and is subject to criminal proceedings.

The people of the State are carrying the burden of that. In his answer, the Taoiseach did not explain what the Government's strategy is for crunching. He said the agreement has already been made so we do not have to remake it. It is a matter of implementing that agreement. Could he, and I ask this fraternally, explain how he intends to do that?

Could I ask the Taoiseach to give a quick reply to Deputy Adams and I will then call Deputy Higgins?

I intend to articulate to the other 26 leaders the necessity of implementing the decision of 29 June. That means we must make progress on setting up the banking union with the supervisory role because the banks cannot be recapitalised directly until that happens. Our starting point is the decision that has been made and the fact that the ESM has had its first board meeting and the Commission has set out its proposals for banking union. So for this to become a reality, that banking union must be put in place. As I said earlier, there are arguments about whether it should be put in place for the 6,000 banks or as a starting point with major banks, which are obviously smaller in number. There are different views about this. I spoke to the Prime Minister of Italy, Mario Monti, the Prime Minister of Portugal, Mariano Rajoy, and the Greek Prime Minister, Antonis Samaras, who all have different views about when it should be implemented and the scope it should have at the beginning. That is a matter for discussion. That is the strategy we want to follow through and there have been a great deal of discussions at official level before getting to that point. I expect the leaders to reflect on what decisions can be taken on Thursday and Friday as a result of the work that has taken place since June in preparing for that to become a reality. Clearly, it is only then that we can determine what the benefit will be for Ireland, which we want to be the maximum amount possible.

What is the Taoiseach's perspective on the development of the general eurozone economy over the next period of one or two years? Is he aware of and has he engaged in discussions with his European colleagues about the fact that the eurozone is beginning to plunge into a new recession? Gross domestic product grew by 0% in the first quarter of this year and fell by 0.2% in quarter two and Germany is now predicted to face a recession. Is this not a very serious prospect for the countries of the eurozone and is it not proof that the austerity policies employed with a vengeance in the so-called peripheral countries but also applied generally are a complete failure? Is not Greece, unfortunately, proof positive of that?

In respect of economic questions and the impact of this eurozone economic situation on this country, could I advise the Taoiseach to be careful when he abuses and lectures people on the left on economic policies?

Would Deputy Higgins please ask a question?

I stood over there some time ago and one of the Taoiseach's predecessors spoke in the same terms. In fact, he expressed a wish that I be banished to Cahirciveen for alleged failed economic policies. A few years' later, former Deputy Ahern's policies went down in flames. I put it to the Taoiseach that it is he who is engaging in fantasy economics when he mentioned one growth rate, which refers to gross national product, thereby covering up the real economy as expressed by gross domestic product and the indicators of the collapse in investment and consumer spending, 14,000 less jobs in quarter three than quarter two and, to the Taoiseach's shame, having to go back to the 1800s to find comparable levels of emigration. It is the Taoiseach who is engaging in the politics of illusion. He is either delusional or taking lines from spin doctors and repeating them, which is even worse.

I think the Deputy get those figures mixed up. The figure of 1.4% referred to GDP and not GNP. Deputy Higgins would not normally go to Cahirciveen but to Dingle where he would find the air from the Atlantic to be even fresher. Why would he not do so as a native son of the great county?

And all the people heading to Shannon Airport.

There is no question that there are serious concerns about developments in Europe and much larger countries in the global economy. China has its own difficulties and there are emerging difficulties in other countries. The United States faces challenges in the time ahead and, clearly, countries within the eurozone have a range of difficulties.

On the other hand, Deputy Higgins is well aware of the potential of the Single Market and that if countries work together with their people and follow a clear path to getting their own houses in order, their economies can grow and get the benefit of a Single Market of 500 million people. Countries on the periphery, including those into Africa, are now growing at the rate of 5%, 6% and 7% with enormous potential for exports and job opportunities. The Deputy is aware that export figures in the agriculture sector have increased with clear implications for growth in our economy. Things are not as bad as the Deputy often paints them. It is not for me to lecture the left or any other group and I have no intention of doing so. Deputy Boyd Barrett knows that I disagree fundamentally with him on a regular basis but his view as an elected Member is as valid as that of anybody. The question of whether it is true is a different matter.

When I spoke to the Greek Prime Minister, Antonis Samaras, he spelt out the nature of the challenge facing people in Greece and made the point that they were looking for an extension of two years from the troika to deal with their problems over a four-year period. The Portuguese Prime Minister, Mariano Rajoy, has a different set of challenges, including those not directly related to the economy here. The French President, François Hollande, has put through his budget and has a range of other issues to deal with and the Italian economy must turn over €20 billion per month. So the situation in the eurozone is of concern because of the extent and extended period of this recession. If other economies cannot purchase, the traffic lights back up and we cannot export, which has implications for us. However, they regard this country as one that is making steady progress towards achieving and retrieving its economic independence, getting out of the bailout programme and moving on. We want this to happen as quickly as possible. I note the successful return to the bond markets earlier this year and the fact that yields have fallen from over 14% to less than 5%, deposits are coming back into the banks and foreign direct investment is strong. However, I do not doubt the scale of the challenge we face and, as Deputy Boyd Barrett and others have noted, I meet with people who, unfortunately, have lost their jobs and are unemployed and looking for opportunities. This is why I was happy to attend an event with the Minister for Social Protection, Deputy Burton, yesterday in Sligo that aimed to start a new process for people who can make a contribution to the local economy and their lives and have opportunities based on their talent and experience and what they can learn. It is not a case of just one country having a set of problems; there are a number of problems associated with countries in Europe. The decisions by the Council on Thursday and Friday will focus on that and, hopefully, some more progress can be made.

Written Answers follow Adjournment.
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