European Council Meeting: Statements

The European Council will meet in Brussels on Thursday and Friday this week. This summit will be the fourth and final such meeting to take place while we have held the chair of the Council of the European Union. The meeting will take place over our final two working days as holder of the Presidency. It will serve as a most welcome opportunity for me to update my colleagues on the broad range of achievements which, through their co-operation and engagement, have been possible on our watch.

I am proud of the job that Ireland has done over the course of the last six months. Whether it was in brokering agreement on key elements of the banking union, advancing agreement with the European Parliament's negotiators on the multi-annual financial framework, MFF, or the reform of the Common Fisheries Policy, our officials and Ministers have distinguished themselves over the course of this semester. Not only have we achieved a great deal, but we have conducted the Union's work in a positive, open and engaged manner. We have considerably added to the restoration of Ireland's reputation as a serious and engaged partner within the European Union and on the world stage. I believe that this, our seventh time to hold the Presidency, is an experience that both the European Union and Ireland can be justly proud of.

This week's meeting of the European Council will, first and foremost, concentrate on overcoming the scourge of excessive youth unemployment. Given the situation here, I wholeheartedly welcome this clear focus for our deliberations this week. It is both fitting and timely. Hand in hand with this, leaders will consider how best to improve access to finance for the real economy across Europe, particularly for the SME sector, which is a key driver of employment, growth and jobs. To this end, I expect we will launch a new investment plan, which will build upon financing to be made available through the next multi-annual financial framework and from the European Investment Bank, including on the basis of the recent increase in its capital. Leaders will also take stock of the implementation of the Compact for Growth and Jobs, one year on from its adoption. While progress has been made in delivering various measures under the compact, it is clear that more remains to be done.

This meeting of the European Council will see the conclusion of the European Semester process for 2013 with the endorsement of a series of country-specific recommendations. I warmly welcome the priority that I expect the European Council will ascribe to the completion of banking union. This is an issue to which, as holder of the Presidency and nationally, we have given top priority. This week's meeting will also take stock of where we are on strengthening economic and monetary union, a process that President Van Rompuy has been working on, with our close collaboration as holder of the Presidency. More remains to be done on this before it is ripe for decisions to be taken. During a meeting that will be an extremely busy one, we will also consider this week issues related to EU enlargement, the EU's relations with its strategic partners and the expansion of the euro area to include its 18th member - Latvia - from the beginning of next year, a development I welcome.

I am satisfied that, as points of particular focus for this meeting of the Council, President Van Rompuy has highlighted the two key issues of youth employment and financing the economy, especially the SME sector. I expect we will agree concrete measures in both of these areas, which are, of course, interrelated.

The most recent EUROSTAT data show there was a further fall in the Union's employment levels in the first quarter of 2013, and there are now more than 26 million people unemployed in Europe. Ireland is one of 11 member states in which the underlying employment trend is positive. It is clear that the painful adjustments we are making at national level are beginning to show tangible, if still modest, results. That is why we can be confident that this year, 2013, will mark our return to net employment growth for the first time since 2007. However, as long as anyone who wishes to work remains without a job, those numbers will remain too high.

At EU level, there is a bleaker picture. European employment numbers have been falling since the end of 2011 and the euro area has now experienced six successive quarters of declining economic output. The reality is that the key risk to the economic outlook in Ireland and beyond is the fragility of the wider EU economy. This is why we set a clear course at the end of last year for an Irish Presidency that would underpin recovery in the real economy and a return to net employment growth. The most recent forecasts are now for a modest pick-up in economic activity in the second half of this year.

I am greatly encouraged that we will this week agree a series of concrete measures to combat youth unemployment. These include speeding up and front-loading disbursements under the youth employment initiative in order that it will be fully operational from the beginning of next year and in order that the disbursement of the €6 billion allocated to it under the next MFF can happen over the first two years - 2014 and 2015 - of the MFF. Member states benefiting under the youth employment initiative, including Ireland, will be asked to develop implementation plans before the end of this year for the youth guarantee, as agreed under the Irish Presidency in February.

Leaders will also highlight the importance of mobility within the Single Market, including through the Your First EURES Job programme and appropriate use of European Social Fund allocations. The ERASMUS+ programme, which supports cross-border mobility schemes, is to be fully functioning by the start of next year. The agreement, during our Presidency, on the recognition of professional qualifications will make a real and substantial difference to the mobility of workers across Europe. Apprenticeships and other work-based learning opportunities are also to be promoted.

The scale and seriousness of the issues surrounding youth employment are such that we will engage with all stakeholders in this area. To this end, leaders at the European Council will hear from social partners ahead of the formal meeting of the Council, and the social partners will present their framework of actions on youth employment, which they adopted earlier this month. I look forward to that exchange.

Closely related to getting to grips with youth unemployment is the need to improve the financing of the real economy. While financial markets have calmed considerably, the most recent ECB lending surveys show that aggregate business lending continues to contract. There is also clear evidence of financial market fragmentation, undermining the potential for new investments where they are needed most. Thus, it is crucial that we work to restore normal lending conditions. In addition to the need to keep to our agreed timelines on banking union, it is clear that more immediate measures are also needed. Business access to finance remains a bottleneck that we must address more effectively. It is in this context that leaders will this week launch a new investment plan which will build upon and leverage the funding to flow from the Union's budget - the next MFF - along with the enhanced lending capacity of the EIB on foot of the increase in its capital. A joint Commission-EIB report which was published last week indicates that the €10 billion capital increase provided for in the Compact for Growth and Jobs is allowing for new lending targets in the EU of €62 billion in 2013 and €182 billion for the period 2013 to 2015. This is an expansion of just under 50% on the pre-capital increase business plan. In the first five months of this year, project signatures are already up by an average of 66% on the corresponding period last year, which is to be welcomed. The report estimates that this year project signatures in Ireland will reach €650 million, up almost 30% on 2012. The April visit to Ireland by the EIB's president, Mr. Hoyer, and his senior management team saw the reopening of the PPP market here for the first time since 2007 and the announcement of €200 million in new credit lines for small and medium-sized enterprises, to be delivered via AIB. We believe there is further room for improvement in the quantum of EIB support for Ireland, and I assure the House that the Ministers for Finance and Public Expenditure and Reform, Deputies Noonan and Howlin, continue to engage closely with them in this regard.

The report confirms that the Commission and the EIB are working with the ECB to develop an EU strategy to alleviate business financing constraints. These discussions focus on reviving structured credit markets to support SME lending in particular. I look forward to hearing the views of President Barroso, Mr. Hoyer and Mr. Draghi in this regard. Beyond this potential for a short-term asset-driven EIB-ECB initiative, the Commission and the EIB have presented options for developing a new joint risk-sharing instrument that would blend resources from the new MFF with EIB lending capacity. This joint instrument would be used to guarantee dedicated credit lines specifically earmarked for the SME sector. I look forward to our discussions on these options, including presenting Ireland as an ideal pilot for the further development of proposals here.

The management of the third European semester cycle of economic policy co-ordination has been an important Presidency activity in the past six months. We have been working hard to improve dialogue within the Council and to strengthen ownership of proposed national reform measures. Our goal has been to ensure that all relevant Council formations worked in a co-ordinated and consistent manner towards a thorough preparation of the March and June European Councils. The stronger fiscal rules now in place, including our finalisation of the two pack, are also supporting a more balanced emphasis on the structural soundness of public finances. The process has worked well. I expect the June European Council will settle, without controversy, clear, country-specific recommendations for the national budget cycles across the European Union in the second half of the year.

Regarding the compact for growth and jobs, progress has been made on implementation of the various measures, but it is evident that much more remains to be done. During our Presidency we have also made solid progress across a range of files critical to delivering on the compact, including on the single market, the digital single market and innovation. Importantly, we will return to take the pulse of the compact on the basis of a progress report to the December European Council. I am particularly gratified that this week's European Council will recognise the breakthrough made on EU-US trade, with the agreement of an EU negotiating mandate earlier this month. This was a very high Presidency priority and I want to pay tribute to the Minister for Jobs, Enterprise and Innovation, Deputy Bruton and his team on their role in ensuring the launch of negotiations on a transatlantic trade and investment partnership, TTIP.

I expect that leaders will this week identify completing banking union as a short-run key priority. That is a position which Ireland, as Presidency and nationally, has tirelessly advocated. I welcome the very considerable progress which has been made since January, especially on the capital requirements directive, CRD IV, and the single supervisory mechanism, SSM. The Minister for Finance, Deputy Noonan will chair a further meeting of ECOFIN tomorrow, with a view to progressing the bank resolution and deposit guarantee aspects of banking union.

The bank recovery and resolution, BRR, proposals set out the framework for how banks in distress are to be resolved. This is a further key step towards completing banking union and ensuring the breaking of the link between sovereigns and banks. In the coming days, the Commission will bring forward a proposal for a single resolution mechanism, SRM, to co-ordinate the application of resolution tools to banks. This should be a natural complement to the establishment of the single supervisory mechanism.

One of the key lessons learned from the euro area crisis is that monetary union must be linked with greater fiscal and economic convergence. As agreed at the EU summit last December, a number of issues on deeper integration of the economic and monetary union, EMU, including ex ante policy co-ordination and the idea of contractual arrangements, have been examined by President Herman van Rompuy. The Irish Presidency has been centrally involved in assisting him through this process, particularly by facilitating a series of consultations across a range of Council formations. President Van Rompuy will present his road map to this week's European Council, but it is expected that time for further reflection will be agreed so that leaders can return to these issues again in October and December.

This month's European Council will also discuss enlargement. Today, at the general affairs council, GAC, under the chairmanship of the Tánaiste, important decisions will be taken on the next steps on the EU paths of Serbia and Kosovo. I hope to see the GAC recommend to the European Council that the EU open accession negotiations with Serbia. The GAC will also take a decision on opening negotiations on a stabilisation and association agreement with Kosovo. I am delighted that these important decisions are being taken during the Irish Presidency. We have prioritised a credible enlargement process, based on the principle of conditionality. The past few months have seen developments in Serbia-Kosovo relations that are no less than historic. The engagement of both countries, including the agreement reached in April, is a testament to the political courage of both Prime Ministers, to the tireless efforts of High Representative Catherine Ashton, and to the potential of enlargement to transform the lives of the people of Europe for the better. It is fitting that the EU now recognises these efforts by agreeing that Serbia and Kosovo should move forward on their individual paths to EU accession.

While this week's summit has an extremely packed agenda, we will be focused on issues central to Ireland's Presidency priorities of stability, jobs and growth. Combating youth unemployment and the facilitation of the real economy through access to finance for SMEs, will be at the top of our agenda. This meeting is all about making a real difference, through concrete measures, to employment and growth across the EU. I will, again, hope to play an active and positive role, as Ireland's representative and as President of the Council, on each of our agenda items at the end of this week. I will, as is our practice, report back to the House following this meeting of the European Council.

As predicted six months ago, the Taoiseach is marking the impending end of Ireland’s Presidency with an active programme of over-claiming progress and under-playing problems. It is certainly the case that there have been moves forward in finalising a number of programmes. Our diplomats have once again shown that they are highly professional and effective. They are rightly seen as among the best in Europe. In contrast, the political progress in the past six months has been slight and there has been no significant advance in tackling the most significant economic and political crisis in the history of the Union. While the Taoiseach spends time patting himself and his Ministers on the back, the EU’s agenda today is exactly as it was six months ago. Nothing that has been done in the past six months gets the Union any closer towards helping its 27 million unemployed, towards addressing the core flaws in monetary union or moving to an economic policy capable of delivering growth and jobs.

In some areas, such as the Union’s budget, banking union and the Common Agricultural Policy, developments have been extremely negative. After a period of relative stability brought in last year by the hope of some radical action, even the situation in the sovereign bond market has taken a significant turn for the worse. May was one of the four worst months for government bonds in 20 years. Many commentators are concerned that hard-won confidence in the future of the euro has been wasted by political leaders incapable of doing anything radical except when faced with a potential meltdown. This week’s summit will aptly sum up the lack of urgency or ambition of the past six months. There has been no attempt to get leaders to confront the clear failure of co-ordinated universal austerity or the need to reinforce the foundations of economic and monetary union.

While the Taoiseach broke with the practice of all previous holders of his office and made partisan domestic comments to an international audience, he did not use the Presidency to lead any call for action or to try to change agenda. We are ending this Presidency embroiled in a political controversy for the first time in 40 years. Never before has any person, let alone a succession of elected leaders in the European Parliament, had cause to accuse an Irish Presidency of manipulation or spin. The scale and tone of the reaction against the Tánaiste’s handling of budget negotiations is unprecedented and glibly trying to brush it away is not acceptable.

In the past two and a half years we have all got used to a Government obsessed with spinning every minor development. We have to endure a daily avalanche of press releases and speeches by Ministers praising themselves and exaggerating the significance of their actions. This approach, when exported to a sensitive negotiation, has been explosive. There have been frantic efforts to cover over the traces of what happened last week but the facts speak for themselves. There was no agreement on the budget. The Tánaiste said he could go no further and it was accepted that the Council and Parliament would be presented with a document which represented what he said was the most with which the Council would agree. The majority of the Parliament’s negotiating team explicitly refused to sign up to this. Yet on Wednesday evening the Tánaiste put out a press release where he claimed there had been a “very significant tentative agreement” which represented, he claimed, “a good day for the EU”. He also claimed that all four of the Parliament’s main concerns had been addressed. It was many things, but “a good day for the EU” was not one of them. Irrespective of what now happens, our reputation as negotiators who play everything straight has been damaged.

The strong words of leaders of the main groups in the European Parliament remain on the record and uncorrected. The Tánaiste could have chosen to issue a low-key and descriptive press release. He did not. He did what his Government does every day in the Irish media: put spin before substance.

There will be a deal on the budget, or MFF, because there has to be a deal. The decision of a core of countries to insist on cutting the overall size of the budget means that it will cause damage to effective programmes. It will also ensure that the Union is a marginal player in the urgent work of directly helping citizens in need. However, within the overall cap there is more that can be done. This should have been a constructive engagement between the political leaders of the Council and those of the Parliament. At this point all we can do is to hope that it has not caused too much damage.

The decision to transfer the entire European affairs division of the Department of Foreign Affairs and Trade to the Office of the Taoiseach was a bad one which should be reversed. The great strength of our diplomatic engagement with the Union has been the focus place on it by the entire diplomatic corps. Previous taoisigh handled more complex and difficult negotiations during Presidencies with only a small European section working closely with the Department of Foreign Affairs. It was a model which worked well and there was no need to change it. It is amazing that the formal role of the Taoiseach in a Presidency has been cut while his in-house staff numbers working on the Presidency have dramatically increased.

Specific matters are due to be finalised this week. It would be better to have no deal on the Common Agricultural Policy than a bad deal. The concluding of this negotiation under our Presidency will be no achievement if it is damaging to rural Ireland. The overall funding framework agreed by the Taoiseach and other leaders earlier this year will see the CAP take a major hit. In order to create room for other programmes, the Union’s oldest and most successful support programme is being cut. The right deal is one which recognises both the economic and social roles of the Common Agricultural Policy. A deal which prioritises protecting larger production units should be rejected.

No matter is more urgent for growth and jobs than fixing Europe’s financial system. If banks do not lend to businesses and families then the crisis will continue to deepen. The Taoiseach's remarks this evening confirm that lending to SMEs is contracting across Europe and in this country. Reasonable lending will not return without a strong banking union. Discussions are ongoing and there is likely to be an agreement on part of the banking union framework this week. However, this is no more than one part of the framework and the available information is that it will be watered-down. Agreement to set aside a part of the ESM to fund direct bank recapitalisation has been delayed for too long and it is likely to be completely inadequate for the job required of it. The Taoiseach has again told the House about the great progress his Government is delivering on this issue. He would be better served accepting that what Europe needs is not just an agreement on disbursing ESM funds, but the right agreement, one which is capable of achieving the core objective of giving a sound foundation to the financial system. Independent analyses show that the agreement which is being discussed is too little and too vague. It appears that an amount of approximately €60 billion for bank recapitalisation is being considered. Independent estimates indicate that an amount of up to €1 trillion will actually be required. Even if this is much lower, the market now understands that major national funding for recapitalisations will be required. This is one of the many factors behind recent increases in bond yields. In terms of retrospective recapitalisation, the Government has never stated what, if anything, it is looking for. It has already described the acceptance of a case-by-case evaluation of needs as a great victory. However, what specifically is Ireland asking for? Last year, the Minister for Finance, Deputy Michael Noonan, informed a Dáil committee that he did not see the benefit of selling off the State’s stake in the pillar banks to the ESM – which would concrete our losses. What has changed since then? The truth appears to be that the ESM will be important for Ireland only in the context of future recapitalisations. I strongly support the idea that the ESM should play a role in a proper initiative to deal with the domestic mortgage crisis. While the Government has spent two years saying it has everything in hand, the Governor of the Central Bank, Professor Honohan, has now stated that the crisis needs to be addressed urgently. In addition, there remains the fundamental point that Ireland has not received full justice for its case for a relief on the impact of bank-related debts. Unlike the Taoiseach and the Tánaiste, the Minister for Finance has generally avoided putting party politics ahead of the national interest. He has consistently stressed how many of Ireland’s debts are directly linked to European policies. Allowing the Central Bank of Ireland to hold its Irish bonds to maturity and returning all euro system profits on Irish bonds to our Exchequer, would be worth €2 billion a year. I am amazed that the Taoiseach has not even mentioned this in public, let alone put it on the agenda for meetings with other leaders.

Many countries have no alternative but to work to immediately cut their deficits while others have a lot more flexibility. The adoption of uniform austerity even in countries with an alternative has caused the most damage in the past two years. It has been self-defeating and has prolonged the recession while widening deficits even further. This has been recognised by every agency except the European Commission. This week’s Council will sign off on a series of country-specific recommendations which mark no significant move from the failed policies of recent years. Ireland should not welcome, let alone promote these, as the Taoiseach has done.

It has been reported that the Government will publish a Green Paper prepared by the Minister for Defence, Deputy Alan Shatter, which will propose that Ireland loosen the triple lock on overseas military engagements. This is happening just as the final countries are formally enacting the Lisbon measures which explicitly address Ireland’s concerns on this matter. It appears that Fine Gael is arguing that Ireland is failing in its European responsibilities and is allowing Russia and China to have a veto over our peacekeeping activities. This is nothing more than an out-of-touch ideological obsession on the part of Fine Gael which ignores the facts of Ireland’s international standing. Few countries in the world are held anywhere near the esteem in which Ireland is held because of its frequent participation in peacekeeping and the wonderful work of our soldiers and gardaí. These missions are not undertaken easily but Ireland does so wholeheartedly and with real impact. The current policy works and it has complete popular legitimacy. There is no reason whatsoever to change it. Such a change will impress no one in Europe and it will contribute nothing to international peace. Instead of sniping at our neutrality, the Government should acknowledge what we have achieved because of it and set out a policy to strengthen rather than to undermine it.

I expect the situation in Syria will be discussed at the Council meeting. The Assad regime, which has been guilty of by far the most violence and the greatest number of killings, is being openly supplied with arms by Iran and Russia. It is now aided by Hezbollah – a client organisation of Iran. In practical terms, the embargo on the rebels has empowered more extreme groups and undermined those who want democracy in Syria. There has been no progress in recent weeks. The regime has gained in strength and has shown no real interest in the Geneva peace process. It appears to believe that it can finish off the rebels and not have to negotiate. If this happens it will be to the shame of Europe and the democratic world that it talked about Syria for so long but could never do anything concrete to help. I am not in favour of a military adventure but the world must not stand by and allow the massacres to spread into new areas. In the second decade of the 21st century we cannot just look away as the Middle East experiences a new mass refugee crisis. Refugees are being refused entry to countries all over Europe and the camp sites in the Lebanon are getting larger every day. This in itself will add to instability in the region.

The past six months has been a time of small developments in the European Union. The programme outlined by President Van Rompuy to the European Parliament a year ago remains unchanged. A period of relative calm brought on by the intervention of Mario Draghi is being squandered because of the complacency of Europe’s leaders. With little urgency and less ambition they have not put in place a credible strategy for jobs and growth. Worse still, they are leaving Europe open to a new debt crisis because of the failure to comprehensively implement past agreements. This summit does not enable a major step forward on any action to resolve the crisis and it is therefore another missed opportunity.

Deputy Gerry Adams is sharing his time with Deputy Seán Crowe.

This week's summit meeting marks the end of Ireland's Presidency of the Council of the European Union. In his remarks today, the Taoiseach claimed to have achieved a great deal and I am sure he has done his best but it is a Presidency which is marked by missed opportunities. These include the failure to advance the cause of peace in the Middle East as well as more important matters closer to home. The most recent example is the Tánaiste's exaggeration about the outcome of negotiations on a potential EU deal on the multi-annual financial framework. This time, Deputy Gilmore's actions backfired badly and have potentially serious implications for Ireland's EU Presidency.

A proposal by the Irish Presidency to the European Council was elevated to the status of an achieved deal. As a consequence of his actions, the Tánaiste has created a storm of opposition to what was negotiated and some MEPs and parliamentary groups have now come out against it. While there has been some notable public discussion, little attention has been paid to the fact that what is on the table will not provide the funding necessary to deliver growth, jobs and, in particular, aid to the most deprived. That includes programmes to fight youth unemployment across the European Union.

I understand the Irish Presidency has not yet formally presented its proposal to member states. The General Affairs Council and ECOFIN meet this week. Will the proposed budget be presented at either of these meetings? Has the Government now formally backed down on the Tánaiste's original claim that there is a deal with the European Parliament? Can the Taoiseach clarify whether the EU budget or MFF will be on the agenda for this week's European Council meeting or will be discussed informally? This is not the first time Irish Ministers have tried to oversell the results of their negotiations at EU level. A year ago, the Eurogroup said it would "break the vicious circle between banks and sovereigns". The Taoiseach told the House that a deal had been done and that the legacy debt issue was sorted. The Tánaiste called the statement a game-changer and the Taoiseach referred to it as a seismic shift. Since then and during the Irish Presidency, there has been no progress on the claims that the Government made. What is now on the table appears to be only a partial break, or dilution, as Olli Rehn put it.

Under EU pressure, the State pumped €30 billion into the pillar banks. In fairness, the European Union has admitted it made mistakes. The State caved in and agreed to repay the toxic Anglo Irish Bank debt. Ireland was a guinea pig in a failed experiment. We have seen in recent days how this debt was placed on the shoulders of the Irish people through a concerted effort by executives in Anglo Irish Bank to defraud the State and the light-touch regulation of Fianna Fáil in government. It is disgraceful, therefore, that the Government turned the bad banking debt of Anglo Irish Bank into sovereign debt. The Government has no problem imposing cuts on child benefit, funding for people with disabilities and respite care and implementing a tax on the family home. While it is unflinching in imposing austerity and cuts, it is mediocre when it comes to demanding a fair deal for Ireland from the other European Union member states. Whatever potential the Government claimed to have achieved last June has failed to materialise.

I will briefly deal with the issue of the Common Agricultural Policy. I note that talks on CAP have resumed in Luxembourg this week. The current system is badly skewed in favour of a small minority of recipients who receive the lion's share of the single farm payment. It is vital, therefore, that the new system includes a significant redistribution of those funds towards the majority of farmers, many of whom are struggling to maintain a viable income. There are a number of proposals on the table which can deliver reform. I strongly urge the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, to support those proposals, which can bring about the required changes. We do not advocate that productive farmers should be at a loss but the claim that those who stand to benefit from a redistribution are unproductive is an insult to tens of thousands of small Irish farmers. It is not a valid defence of a system under which in some counties a handful of individuals and companies receive as much in payments as hundreds of others.

The ongoing conflict in Syria is a cause of great concern. Efforts by outside elements to bring even more arms into the region must be opposed. I welcome the Tánaiste's position on behalf of the Government. Will the Government actively promote this position at the summit?

This is the last European Council meeting under the Irish Presidency. I wish the Taoiseach and his team well in negotiations on discounts. Ireland's Presidency theme was stability, jobs and growth, and it was stated that 2013 would usher in a new phase of recovery in the European Union. Deputy Adams has outlined how the Presidency has failed to deliver for Ireland macroeconomically. It has also failed to usher in a new phase of recovery in the European Union, especially for those under the age of 25 years.

While there were positive developments during the Presidency, the lack of urgency or a sense of crisis on youth unemployment in particular has been criticised. One in four young people in the European Union is currently unemployed. That is a shocking figure and completely unacceptable in terms of what it means for those young people, their families and their communities. This State, which has experienced record levels of emigration since 2009, has one of the highest rates of youth unemployment in the European Union, at over 30%. It is obvious that without the safety valve emigration has provided to the Government, unemployment levels in the State would be significantly higher. The Taoiseach indicated that employment in the European Union is falling while unemployment is rising. The effects of youth and long-term unemployment combined with high rates of non-participation in education and training pose a serious social and economic threat to the European Union. It may be the most serious threat since the European Union was formed. Notwithstanding the fact that there are 26 million people unemployed across the European Union, according to the Taoiseach's own figures, there is no sense of urgency about tackling the problem. A Eurofound report investigated the financial costs of youth unemployment across the European Union. It found that the cost to the European Union of young people not being in employment, education or training is a staggering €153 billion annually. That is the task facing the Taoiseach in the forthcoming meeting.

The European Council has repeatedly told us that it will establish the youth guarantee and tackle this major issue. In February, the Council announced that a youth guarantee worth €6 billion would be put in place for 2014, to run to 2020, in countries with youth unemployment rates of over 25%. The message young people would like to hear is that apprenticeships will be created, but we are not seeing any of that. There was a smokescreen in the creation of 500 apprenticeships in the ESB, but we have not seen that extended across State bodies or local authorities, which might have a significant impact. The idea of an EU-wide youth guarantee is positive and I welcome the intention and purpose of the proposals. My main concern is that the youth employment initiative fund is grossly inadequate to fully address the massive problem of youth unemployment across the European Union.

I note that the Council meeting will discuss the youth guarantee and I urge the Taoiseach to strongly recommend that the Council consider supporting an increase in the funds available. I have raised this proposal consistently over the last six months. Any youth guarantee must reflect the scale of the problem across the European Union. Everyone accepts that the problem is getting worse, not better. The increasing numbers of young people in unemployment and the proposals from the European Parliament to expand the eligibility and criteria for the scheme must be addressed. While the passing of the €6 billion youth guarantee proposal will get some positive headlines for a few days, if it is not robust or funded sufficiently, it will fail those millions of young people who are crying out for hope and some chance of employment.

My concern is that all it will do is raise the hopes of young people in a couple of months without being enough to stimulate the economy and resolve the issue. The legacy of Ireland’s EU Presidency could rest on achieving a youth guarantee that is fit for purpose and will achieve success. The current proposals do not do that.

Under the Irish Presidency there have been some negative developments in foreign affairs. Recently, the European Union has decided not to renew the arms embargo on Syria. This is a retrograde step as sending arms to the war-torn country will only increase the bloodshed and violence. We were told the British Government is planning on directly arming the rebels now on the back of a game changer, namely, the use of chemical weapons. No information is coming out of the country in respect of who was using the weapons. There is no information on the Assad regime and its chemical weapons uniforms. There are no photographs. There is a big question mark over this but it seems to be the game changer. What is happening in the country is unacceptable. Ireland has played a positive role, as Deputy Adams said, and I hope we can continue to do so. People are crying out for support in those camps and what is happening is appalling.

Members of the Oireachtas Joint Committee on Foreign Affairs and Trade went to Jordan recently to look at the conditions. Conditions in Lebanon are getting worse. If Ireland has a voice, it must speak out about what is happening in that part of the world. It is unacceptable and it will lead to further bloodshed, hurt and families suffering. The decision not to renew the arms embargo is a retrograde step. I call on the Taoiseach to use whatever influence he has on the rest of the Council to bring some common sense to the issue.

I propose to share time with Deputy Stephen Donnelly. I am delighted to speak on pre-European Council meeting statements. In case the Taoiseach thought I was mocking him, ag magadh faoi, I compliment him on his efforts and travails all over the world and in Europe over six months and on the self-belief and what he achieved during the Presidency. I compliment him on being gracious most of the time, except when he took the liberty to undermine the Committee of Public Accounts and its Chairman, Deputy John McGuinness, while he was in Rome. It was a serious misjudgment. Perhaps he got carried away by spin doctors encouraging him that Deputy McGuinness was vulnerable and could be ousted.

I supported the holding of the G8 summit in Fermanagh and the supporting legislation passed by the Minister for Justice and Equality, Deputy Shatter. I disassociate myself from remarks made by Deputy Clare Daly last week. We can have problems but we cannot have something happen to the leaders while they were here. The exposure Dublin and Wicklow got was fabulous, as was the visit of Mrs. Obama and her children to Dublin. My daughter, as a Foróige delegate, was privileged to attend the Gaiety Theatre for the Riverdance performance. Deputy Clare Daly does not have to look at Bono as a tax exile; she can look much closer to see tax cheats. Her comments were hollow and her wording was despicable. I have no truck with it and I do not support it.

Since the Council last met, it has been confirmed that over 27 million Europeans are unemployed. Growth projections in key economies, the eurozone and the European Union as a whole have been cut. The EU budget is already inadequate for what is required and has been delayed. The holding of these pre-Council debates is often held up as a shining reform and an increase in accountability but the reality is that there is no accountability because we are continually getting the Taoiseach's statement on how everything is great and important things are being decided. I wished the Taoiseach well but he is self-deluding and thinks he is punching above his station. He is getting quite carried away. That is why I said I would welcome him back to reality next week. Perhaps he will deal with the issues of misery and trauma that Irish people are dealing with.

Apparently, tackling unacceptably high rates of youth unemployment is a top priority for the European Union, yet it is incapable of getting it right. We often hear the best youth employment results are seen in EU countries where young people have the chance to get to take part in high quality traineeships and where well established apprenticeship schemes form an integral part of the training and work placement system, none more so than our own. The figures are being manicured because if emigration was not taken into account the figures would be appalling. The EU Commissioner for Employment, Social Affairs and Inclusion has commented on this:

The euro crisis has brought a double-dip recession with devastating social effects, particularly for 'peripheral' countries and the young generation. But our latest analysis confirms the advantages of apprenticeships and traineeships in terms of helping young people to get a quality job. This underlines the urgency for all Member States to make the Youth Guarantee a reality before the end of 2013.

We also heard calls on all tiers of Government to improve career services and employment agencies. The European Commission has proposed setting minimum quality standards for apprenticeships at European level to ensure skills acquired can be recognised throughout Europe. What has the Government done about this? Precious little. Tús maith, leath na hoibre was the old Irish phrase. At the start of the six months, we had noble words and aspirations about stability, jobs and growth. We have seen none of these. We saw weakness and talk and wasteful meetings that achieved nothing.

Last week the Tánaiste declared, in the kind of spin that he has become good at since he crossed the Chamber, that he had the financial situation sorted out. MEPs from many countries and other agencies in the European Union pointed out there was no substance to his claim. The only inroads to the unemployment crisis is the number of spin doctors and advisers that the Government has hired. They should disengage them and have some honesty, soul-searching and truth and we might get somewhere. That was a real humiliation and a new low in the dying days of our Presidency.

With regards the reform of the CAP, the Minister for Agriculture, Food and the Marine, Deputy Coveney, must deal practically and pragmatically. We must have balance and we cannot have the likes of Cement-Roadstone Holdings, airport authorities and other conglomerates getting large single farm payments. It weakens his chairmanship of the issue by allowing this to continue. We must have sharing and the ordinary small farmers, who are suffering and struggling, must be supported. Farming organisations and the IFA will not thank me for this but we cannot stand over massive payments and unfair penalising of smaller farmers because of a calendar date. We want to get all small farmers productive and keep them productive. We should make sure that we get the best use out of our land and family farms and we must encourage inactive farmers to become active. If we blindfold them and tie their hands behind their backs, they cannot do so.

We have failed unilaterally in the banking problem. There is abject failure on behalf of the Taoiseach, and none more so than in the case of the tapes leaked in the dying days of his Presidency. I wonder why they were released and I wonder whether it has anything to do with the Bill going through the Dáil as a smokescreen. Today, the Taoiseach admitted the Garda Síochána has had the tapes for four years but he cannot inform the House whether the Minister for Justice and Equality has heard the tapes. If not, he should have.

Having been forced by the European Union to bail out these banks, when the EU recklessly lent money here knowing that our banks were bust, we should have used the Presidency. The Taoiseach will not do so because he might upset someone if he stood up to the people over there and told them they must share some of the blame and take some of the responsibility.

I am sorry the Taoiseach had to leave because I intended to congratulate him on the EU Presidency which he and his Cabinet have held for the last six months. I was in Brussels recently where I spoke to MEPs and officials. They complimented the Irish officials on being very professional. They spoke in particular about the officials in the Department of Finance. I was delighted to hear it. Our officials have acquitted themselves very well and have certainly earned the professional respect of their counterparts in Europe. It was great to hear that.

The Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, has done an excellent job. I am sorry the Common Agricultural Policy, CAP, has not been wrapped up, but the reforms in the fisheries policy are fantastic. He has acquitted himself very well, including when we were dealing with various crises in Ireland such as the fodder crisis.

The Minister for Finance, Deputy Michael Noonan, has done a good job. He has progressed well the talks on the European Stability Mechanism and the bank resolution mechanism. As we know, it was never going to be possible for the Minister to get concrete agreements before the German election. It appears everything is in stasis. The Minister has done a very good job within the constraints he has had to deal with.

The Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, should also be congratulated. He has led the opening of incredibly important trade talks with the US. Hopefully, there will be an EU-US free trade zone, which will be worth billions of euro and dollars on both sides of the pond and will lead to serious job creation.

The Taoiseach and his team have acquitted themselves very well. They should be very proud of themselves in holding the Presidency at a very difficult time for Ireland and Europe.

The three issues under discussion for the last Council meeting in which Ireland will hold the Presidency are conclusion of the European Semester, evaluation of efforts to boost competitiveness, jobs and growth and progression on Economic and Monetary Union, specifically relating to the banks. I will talk a little about the bank resolution mechanism. The Minister for Finance, Deputy Michael Noonan, appeared before the finance committee recently to discuss the steps he is taking. I support what he is doing and hope he can progress it well. My understanding is that a new bail-in system will be introduced, whereby shareholder capital would be used first, followed by junior and unsecured creditors and then senior creditors or senior bondholders and depositors. If memory serves, the Minister is keen to separate depositors and senior creditors. I wish him all the best in that.

In Europe at present and possibly beyond Europe depositors and senior creditors legally rank equally if any type of bail-in is required. I do not agree with that. It is right, proper and healthy that a clear legal distinction is drawn within the eurozone, and ideally across the European Union, whereby professional investors are seen for what they are, professional risk takers, and depositors, particularly small depositors, are seen for what they are, which is people who are trying to put their money in a safe place. The Minister, Deputy Michael Noonan, is trying to differentiate between the two and I wish him the best in that.

I would add a caveat, which I believe the Taoiseach, Tánaiste and the Minister should pursue. There is a potential danger regarding the stipulation that the first group of people to take a hit in a bail-in should be the shareholders. We are still the shareholder in some of our banks and there should be a caveat introduced which recognises that. In the normal course of events and in a steady state banking system shareholder capital should go first, and I agree with that. However, in the case of AIB, the bit of Bank of Ireland we own and Permanent TSB we as the shareholders have already put in a vast amount of money. If the quality asset test to be carried out by the ECB in the new year shows that these banks need more capital, it should not have to come yet again from the Irish citizens because they are essentially the shareholders of these banks.

I wish to address the Anglo Irish Bank tapes which have come to light. They dominated Leaders' Questions, and we are all listening to them constantly and getting very angry about them. This is relevant to the discussion that is taking place in Europe about Ireland and potential recapitalisation. Germany and other creditor countries could look at this and think that this increases the case for Ireland not getting any recapitalisation from them, because Ireland could not even take care of its banks and allowed the banks to deceive and entrap it. I do not agree with that position. I believe and hope that another very strong message can go out to our European colleagues, which is that the Irish citizens took the hit for the entire European financial system. Had we not committed a huge bail-in to keep these banks open, there was a risk there would be contagion. I am not convinced there would have been contagion but certainly the ECB and many other people believed there would be; therefore, we took the hit.

We now have the smoking gun. We have proof that not only did Anglo Irish Bank deceive the Government of the day, it also engaged in entrapment. It did not just decide to ask for €7 billion and hope that it would be enough and that it could trade its way out of the problem. It decided to ask for €7 billion knowing a great deal more would be required, because once the Central Bank gave €7 billion, it would have to continue to give it money. I hope that message strengthens our case for both future and retrospective recapitalisation. Indeed, the Government bonds which replaced the promissory notes should be examined. Is there now a case to say that although we have turned them into sovereign debt, there possibly was a criminal act involved in this case - certainly there was entrapment and deception - and that there is a case for a negotiation with the ECB whereby it will not call on all of these tens of billions of euro in sovereign debt?

I will conclude by asking the Government to take a further message to Europe for this last meeting. There is, quite correctly, a focus on job creation. The economic evidence shows that the single biggest stimulant of job creation is deleveraging of household debt. Economic analysis shows that it is only when one deleverages household debt that the business sector begins to invest, which is what ultimately creates jobs. The Taoiseach, the Minister for Finance, Deputy Michael Noonan, and the team should take that message to Europe and tell European leaders that if they are serious about job creation and helping the youth, they must find ways to deleverage household debt. I will be introducing a product, which I will submit to the Taoiseach and the Minister, Deputy Noonan, shortly. It is a debt for equity product which I hope will help the situation in Ireland and, potentially, further afield in Europe.

I thank colleagues for their contributions to this debate in advance of the important Council meeting later this week. I will take up Deputy Stephen Donnelly's very generous remarks, particularly about the officials who represent this country not just at the permanent representation in Brussels but also the officials across the Departments. They have worked tirelessly over the last six months in co-operation with colleagues in Government on a number of these files to get them over the line. The reaction the Deputy got from people in the European Parliament is the reaction I constantly get. This is our seventh Presidency and we have built up a great deal of experience. The real unsung heroes and heroines in this are the Irish public sector officials, particularly those who have been dealing in such a clear way with all of the work. We owe them a great debt of gratitude. I say that on behalf of the Government.

On the second issue Deputy Stephen Donnelly raised, we will attend an ECOFIN meeting again tomorrow evening at which we will hopefully obtain agreement on the bank recovery and resolution area, which is the second pillar of banking union. A clear responsibility has been given to us by the political leaders of Europe to resolve the outstanding difficulties on banking union. The Deputy is correct to say that the way in which the bailouts were constructed, particularly in this country, was a disaster. There is an understanding across the European system about the scale of the burden that was placed on Irish taxpayers as a result of that disastrous policy. We are trying to unwind that and work it through. The fact that the Minister for Finance, Deputy Michael Noonan, obtained a recognition in the eurozone statement of last Wednesday that the ESM could provide the opportunity for retrospective recapitalisation of the banks was important, but there are outstanding issues on the banking union side that must be agreed tomorrow evening.

The first of the two issues is the hierarchy of the bail-ins. There was a sacrosanct agreement that no depositor with a deposit up to €100,000 would be touched. Clearly, the difficulties that obtained in Cyprus in terms of the construction of the deal were such that it was not positive; that is the most diplomatic way of saying it. Second, it was agreed that unsecured creditors would take a hit, followed by those associated with subordinated or junior debt who, in turn, were to be followed by senior bondholders. The ultimate question is the extent of the bail-in and the nature of the hierarchy.

There is a wide variety of views among the 27 member states. In the past two decades many member states, including Sweden, have gone through what I have described. The scale of the bail-in was different from one country to the next. The fundamental issue is the flexibility afforded by the non-eurozone countries as opposed to those in the eurozone. If the ESM is too flexible, it will not have the durability and power it should have. If it is not flexible enough, we will not obtain the agreement of the 27 member states. It is in the middle of all this that we are trying to construct an agreement with colleagues which, as I said, we hope to conclude tomorrow evening. It will be difficult, but we should not pretend otherwise.

If we are to obtain the confidence of the markets and citizens, the banking union system should be robust, strong and able to meet the kinds of challenges that presented some years ago. That is obviously a crucial issue in the last week of the Irish Presidency and one on which we will continue to work.

The youth unemployment problem was referred to, as was the youth compact, which is such a fundamental part of the MMF negotiations. Some of the remarks made on what was just a political attack on the Tánaiste for his work in the MMF negotiations were badly thought out. More than anyone, the Tánaiste has been attempting to marry the concerns of the Parliament and the Council in trying to obtain some agreement on what will be a crucial area of investment for the European Union in the next seven years. We need to reach agreement on this issue. European citizens who recognise the importance of the European Union's budget also agree that we should reach agreement. That is what the Tánaiste is attempting to do, not just on our behalf but on behalf of the entire European system.

Finance is the key; I do not disagree at all with this, which is why we are examining new means of non-bank funding and the opportunities of the European Investment Bank, particularly as it would ease the funding strain on SMEs. It is worth highlighting, as the Taoiseach did, that over €650 million in investment by the European Investment Bank is available to this country this year if we can get the projects and private sector capital in place. I had an opportunity to meet the president of the bank, Mr. Hoyer, in Luxembourg last week. He is more than aware of the challenges we face in Ireland. The European Investment Bank wants to help Ireland and make funding available in order that we can provoke public sector infrastructural capital projects again. It is worth saying that we now have PPPs across the line is a significant step because it means people are again prepared to invest in Ireland.

All of these matters will be very important, right up to the last moment of our Presidency. The positive remarks in this House on what we are trying to achieve are greatly appreciated.