I welcome the Minister of State, Deputy Creighton, to the House.
Ireland's Presidency of the Council of the European Union: Statements
I am pleased to have the opportunity to address the House on preparations for Ireland's Presidency of the Council of the European Union. I will also update Members on the outcome of last week's European Council meeting.
With 67 days left until 1 January, work is intensifying at all levels. We are now also getting a much clearer sense of the issues on the agenda of the Council in the first half of next year which we can aim to advance. At the beginning of the month members of the Government travelled to Brussels for discussions with the College of Commissioners on our Presidency. We were pleased with the outcome of the meeting which confirmed there is broad agreement between the Government and the European Commission on the main priorities and objectives we have identified.
The Taoiseach also had the opportunity while in Brussels to meet the President of the European Council, Mr. Herman Van Rompuy. The President of the European Parliament, Mr. Martin Schulz, MEP, also visited Dublin at the beginning of this month for discussions with the Taoiseach and the Tánaiste and was invited to address the Dáil.
I have just returned from my latest visit to the European Parliament in Strasbourg and discussed the main issues that are now emerging as priorities in the Irish Presidency programme. I also discussed the particularly intensive period of engagement with the European Parliament in the coming weeks which I know will involve Members of this House. Between now and the end of the year, delegates from five committees from the European Parliament will visit Dublin as well as the three main political groups in the Parliament. At the end of November the President of the European Parliament, Mr. Martin Schulz, MEP, will return to Dublin with the Conference of Presidents, that is the leaders of the political groups in the European Parliament. I very much welcome this engagement by the European Parliament in advance of the Presidency and I particularly welcome the involvement of the Oireachtas in this process.
It is vital, as the European Union takes steps towards closer integration in response to the crisis, that the European Parliament and national parliaments play their respective roles in ensuring democratic accountability for our actions.
Work is continuing on the development of the Irish Presidency programme, which will be published at the end of this year. This is informed by the discussions that have been taking place at political level. It will also take into account the Commission's work plan for 2013, which was adopted on Tuesday. At the same time, the Permanent Representation in Brussels will also draw up, with the Commission and the Council Secretariat, the agendas of the Council meetings that will be held during the first half of next year and which will structure debate at Council during our Presidency.
I am pleased to update the Seanad on work that has been under way on the Presidency since I last addressed this House in May. I will first highlight some of the main priorities that now look set to dominate Ireland's Presidency programme. The main overarching focus of the Presidency, across all policy formations, will be identifying and advancing legislation that can contribute to creating the conditions for sustainable economic growth in Europe and job creation. The agreement at the June European Council on a compact for jobs and growth was important. We will now work closely with our EU partners to make this commitment a concrete reality. We have identified policy and legislative issues across several Council formations that we consider can contribute to longer-term growth and job creation. Many of these issues are linked to the Single Market, which has delivered so many benefits and opportunities for our export sector and consumers in the past 20 years.
Ireland will seek to make progress on draft legislation outstanding under the current Single Market Act, including the professional qualifications directive. We also want to ensure that business and consumers reap the benefits of an evolving Single Market and e-commerce. The Single Market Act II was published on 3 October by the European Commission and Ireland strongly supports the focus in the Act on making progress in areas such as integrated energy, transport networks and the digital economy.
During our Presidency we will also seek to spur growth in the digital economy and the digital Single Market by working to advance agreement on key issues, including intellectual property rights, cyber security, e-identification, data protection and high-speed broadband roll-out. In a rapidly changing global economy, we also need to ensure that Ireland and the EU are equipped to play a full role in the research, development and innovation sectors. For this reason, we are placing a strong emphasis on advancing the Horizon 2020 framework funding programme which can play an important role in supporting research and innovation across the EU and creating smart jobs and sustainable growth. Completion of the European Research Area, ERA, and the future development of the European Institute for Innovation and Technology will also be priorities for the Irish Presidency given their potential for job creation and sharpening the Union's competitiveness.
Senators will be aware of the value that the Government attaches to new markets for Irish exporters. In addition, to the work prioritised in the internal Single Market, Ireland also plans to place a strong emphasis on the external trade agenda. The Minister for Jobs, Enterprise and Innovation, Deputy Bruton, will host a ministerial meeting in Dublin next April which will focus on strengthening EU-US trade relations. The Presidency will also work on progressing free trade agreement negotiations with other strategic partners, including Japan and India.
Ireland, as Presidency, will also work to strengthen the EU economy in the coming decades by making progress on the entrepreneurship action plan. To support the next generation of entrepreneurs and to better serve citizens, Europe also needs to invest strategically in its infrastructure to support economic development and maintain its global competitiveness. The Presidency will prioritise work on the connecting Europe facility to underpin development in the Union's transport, telecoms and energy infrastructures.
As Presidency, Ireland will also work to promote greater equality, social cohesion and inclusion in Europe. Elements of the Europe 2020 Strategy, including improving training, skills and access to education, will play a critical role in equipping citizens, particularly young people, to find work and in attracting investment into the EU. The issue of skills is central to fighting unemployment and will be a focus at the February education Council in the context of discussions on the European Semester and Europe 2020. Following the publication of the youth transitions package, the Presidency will focus on youth employment and mobility at the February Council, and at an EPSCO informal ministerial chaired by the Minister for Social Protection, Deputy Burton, in February with a view to agreeing a Council recommendation on a youth guarantee. Time does not permit me to go into detail today on all of the dossiers that we are planning to advance to fight the crisis, to reinvigorate Europe's economy and to create jobs. However, four years into the crisis, our citizens demand and deserve action. For this reason, jobs and growth will remain our central focus.
To underpin Europe's economic recovery and to ensure coherence in the Union's policies, agreement needs to be reached on the EU budget from 2014 to 2020. Many of the issues that I have outlined above are dependent on the budget, including issues of critical national importance to Ireland such as Horizon 2020, CAP and CFP reform. Securing agreement on the EU's future financing is a key priority for the current Cyprus Presidency. Ireland stands ready to assume whatever tasks remain at the start of its Presidency, including making progress on the approximately 70 pieces of implementing legislation related to the MFF.
With regard to last week's European Council, I accompanied the Taoiseach to the summit meeting in Brussels on 18 and 19 October. European leaders had a number of substantive issues on their agenda last Thursday and Friday, including in the economic sphere, a reflection on the possible future shape of Economic and Monetary Union, which underpins our shared currency, and taking stock of implementation of the compact for growth and jobs. Beyond those economic issues, Heads of State and Government also had a good exchange on our relationship with the Union's strategic partners, most notably with China, and they adopted a comprehensive set of conclusions on the developing situations in Syria, Iran and Mali.
The central focus of deliberations last week was on the means of strengthening Economic and Monetary Union and most particularly on progressing towards so-called banking union. The framework for these discussions was provided by President Van Rompuy's interim report, Towards a Genuine Economic and Monetary Union (EMU), which he presented to leaders. The report was well received and leaders agreed a comprehensive set of conclusions based on the four essential building blocks necessary for a strengthened EMU, which President Van Rompuy identified previously. These are an integrated financial framework or so-called banking union; an integrated budgetary framework; an integrated economic policy framework; and, critically, democratic legitimacy and accountability. It was agreed that President Van Rompuy will continue his consultations with member states and others before bringing forward his final report to the December European Council. That report will set out a specific and time-bound roadmap for strengthening EMU, including recommendations for concrete steps to be taken.
Last week, leaders reaffirmed their commitment in June to break the vicious circle between banking and sovereign debt. Heads of State and Government also clearly reaffirmed the commitment to provide for the recapitalisation of euro area banks by the European Stability Mechanism, ESM. With regard to the single supervisory mechanism, which is a critical step in the creation of a banking union, leaders have now agreed a clear timeframe for its entry into operation as a matter of priority, with its legislative framework concluded by the end of this year and work on the operational implementation of the single supervisor to happen during the course of 2013. The European Council has also tasked the Eurogroup of Finance Ministers, including the Minister for Finance, Deputy Noonan, to draw up the exact operational criteria that will guide direct bank recapitalisation by the ESM in full respect of the June decisions. This, too, is a positive outcome from our perspective.
As the House will be aware, in the aftermath of last week's meeting, the Taoiseach had a telephone conversation with Chancellor Merkel on Sunday afternoon last and that on foot of that discussion a joint communique was issued by the two leaders. Chancellor Merkel expressed a genuine appreciation of the steps the Irish people are taking to turn our economic situation around and her full support for our efforts to get back to the markets. The joint statement makes it clear that the commitments made to Ireland at the end of June stand and that the vital work involved in examining the situation of the Irish financial sector will be taken forward by the Minister for Finance, Deputy Noonan and his colleagues in the Eurogroup of Finance Ministers, with a view to further improving the sustainability of our programme. Chancellor Merkel also acknowledged that Ireland's case is a special one and that this would be taken into account during the discussions ahead.
Significantly, President Hollande of France added his voice, when the Taoiseach met him in Paris, in appreciating the special situation which Ireland faces and in acknowledging that these circumstances will need to be taken into account as the Eurogroup now takes this work forward.
These statements are a most welcome reaffirmation by key European leaders that the 29 June agreement to address Ireland's situation will be honoured. I reassure the House that the Government will continue to work painstakingly to secure the best possible deal for the people of Ireland. We have had considerable success and I am confident our approach will lead to a positive outcome. This work will be detailed and technical and may take some time, but the Government has always said it is better to get the best possible deal rather than a quick deal.
Before concluding on last week's European Council meeting, I should note that leaders also adopted a comprehensive set of conclusions on the implementation of various aspects of the compact for growth and jobs. This was a most welcome return by the Heads of State and Government to assessing implementation of the compact which they adopted as recently as June last. While progress has been made in beginning to implement the various elements of the compact, what is evident is that more needs to be done. Just as in the case of EMU and the banking union, implementation is key. Taking forward the various aspects of the compact at EU level, such as the Single Market, youth unemployment or expanding opportunities for external trade, will form an important aspect of our work in the Presidency next year.
Related to the ongoing work at European Council level, a final key overriding priority for the Irish Presidency will be to ensure stability and restore trust in the euro area for business, investors and consumers. For this reason, Ireland will work to ensure the effective implementation of governance measures through the EU's new system of economic and budgetary co-ordination. Trust also needs to be restored urgently in other sectors that are critical to the functioning of a modern economy, and this is why we are placing an emphasis on making progress on the banking union proposals.
I will outline some of the other fundamentals that will guide the Irish Presidency in 2013. We are committed to maintaining the reputation earned in our six previous Presidencies for acting as a fair and impartial officeholder. We believe the EU is at its most effective when its members move forward together to deliver results for all Europe's citizens. Also, as I stressed to the House last May, the Government is committed to delivering a very cost-effective Presidency.
The Presidency is a massive task for any administration, but especially for a smaller state like Ireland. Since I last spoke to the House in May, I have met many of my counterparts from the European Parliament, other member states and the Oireachtas. I have also met and briefed non-governmental organisations and civil society on our Presidency and have worked to factor their views and concerns into our Presidency programme. Next year, 2013, is the European year of citizens and one of my aims during the Presidency will be to promote much stronger levels of direct public discussion and engagement in EU affairs. Ireland has had a very interesting journey during its first 40 years of EU membership. The Presidency will demonstrate once again the positive role Ireland can play in Europe. It can also serve as a useful point of public discussion on how we envisage Ireland's role in an enlarged Union.
I thank the Senators for inviting me to speak here again and for their views and the contributions they will now make on the Presidency programme.
I welcome the Minister of State, Deputy Creighton, to the House. I express our appreciation for the respect she has shown the House. She is prepared to come here to brief this House, which has enormous experience. Putting it in context, in the coming nine months the Minister of State will have responsibility for European affairs during Ireland's Presidency and it will be 15 years before someone else will have that experience. It is an enormous task but I know the Minister of State is up to it and I commend her for her work to date. Her statement was very comprehensive and detailed and I do not need to go through all of it. It was a good exercise for so many members of the Cabinet to go to Brussels. I do not think it happened previously in the lead-up to a Presidency. Perhaps I am wrong. It was quite innovative to meet in Brussels.
The Minister of State has the benefit of having very experienced secretariats and ambassadors in Brussels and Strasbourg and they are very well geared towards the task ahead. When other countries such as Croatia held the Presidency, Ireland gave them assistance because of the experience we have. Perhaps in 15 years time the Seanad will not be here; therefore, we are lucky to be here and that the Minister of State is here today to outline the position on the European Union.
I have a question on the College of Commissioners during the Presidency. The previous arrangement was that the Commission came to a country during the first days of its Presidency. I am not sure whether this will be implemented. It was an opportunity for each Commissioner to meet the appropriate Minister to discuss various arrangements.
It is very encouraging to see five committees from the European Parliament as well as three main political groups visiting Dublin prior to the beginning of our Presidency. The group with which Fianna Fáil is associated, the European Liberal Democrat and Reform Party, ELDR, will visit in early November, and Dublin will reap great economic benefit from the number of delegates who will come from throughout Europe. It is very encouraging. The programme is quite interesting with regard to energy and other issues.
Departments are focused on the Presidency. We will not have this opportunity for another 15 years and every Department must aim to maximise the benefits in this regard. The Minister of State said the priorities for the Presidency will be jobs and growth. This is very commendable and they must be implemented. Our influence and the fact we are in a particularly difficult situation will be of great importance in this regard. Opportunities which arise in future with regard to exports, the Single Market and digital technology are very important.
With regard to the European Institution of Innovation and Technology, we are not making as much progress as we could on wind and wave energy. Ireland is regarded as the best location for wind energy in Europe. I appreciate domestic political and planning reasons arise and I hope we will come to terms with them. We have regions and areas which could be very beneficial to this sector. The power and energy of the Atlantic Ocean is enormous and technology has been developed in this regard. I presume the Minister of State and our Commissioner, Máire Geoghegan-Quinn, who is from the area, would support this development.
An area that has been examined by many people but not yet conquered is harnessing hydrogen. If hydrogen could be economically developed, promoted and harnessed-----
The time has concluded.
Before I conclude, I wish to mention the role of the Seanad. As a former Member of the Dáil, the Minister of State was part of the committee, as was I, which brought forward-----
I am a current Member of the Dáil.
I apologise. The Minister of State was a former member of the committee.
Do not write me off yet.
After the next election, maybe.
Mea culpa. I have no doubt the Minister of State will be returned again and again. The Minister of State was part of a committee on the enhanced role for national parliaments under the Lisbon treaty. The Leader of the House will bring forward a proposal that the Seanad would scrutinise European legislation from early January 2013, for which I commend him. I commend the Minister of State for pushing this forward. We have a role under the Lisbon treaty. No committee in the Oireachtas has more experience than the Seanad. It is an experienced committee representing all shades of opinion through its 60 Members.
I commend the Leader of this House who is pushing the boat out with the backing of the Minister for State and I hope that will start during our Presidency.
I join in the welcome extended by the House to the Minister for State and thank her for a comprehensive update on the Presidency's priorities for the forthcoming six-month term. I very much welcome the fact that the overarching focus of all Government activity will be on jobs and growth because those are the biggest issues and challenges facing our country and Government. I also very much welcome the comprehensive update on the outcome of the European Council meeting held in Brussels last week at which considerable progress was made on the future of economic and monetary union. From an Irish point of view, the meeting was particularly positive as a commitment made in June to break the link between banking and sovereign debt and to provide for the recapitalisation of the banks by ESM was confirmed.
However, there was, as the Minister of State alluded to, some concern in Ireland following remarks made by Chancellor Merkel in a response to a question about Spain that the issue of Ireland's bank debt and recapitalisation by the ESM was not as positive as had been indicated following the June meeting. Certain politicians and a negative media attempted to paint the worst possible scenario and cause much unnecessary concern among our citizens. I compliment the Taoiseach on his swift and decisive action in clearing up the confusion with Chancellor Merkel and the issuing of the joint communiqué which reaffirmed the commitment of 29 June that Ireland's bank debt would be looked at, that Ireland was a special case and that the circumstances surrounding the banking crisis were unique. This will be taken into account by eurozone Finance Ministers as they begin negotiations on how the ESM will work once a banking supervision system is in place. We are fortunate to have the Minister for Finance, Deputy Noonan, negotiating on our behalf. The recognition by the Chancellor of our unique situation and the strong support for our difficulties by French President François Hollande is highly significant and demonstrates the excellent work being done by the Taoiseach, the Tánaiste, the Minister for Finance and the Minister of State for European Affairs in gaining support for Ireland through diplomatic initiatives.
I do not intend to rehearse the reasons we are in this unique situation but our negotiators need strong political support at home as they work to achieve the best possible outcome in respect of our unsustainable banking debt and make our return to the markets more certain. Unlike others, I am not too concerned about the timescale for achieving our objectives. We all know the structures must first be put in place, such as the single supervisory mechanism for banks, but we all want to see an outcome that will give us hope and confidence for the future.
President Van Rompuy at the opening of the European Council meeting spoke about the need to concentrate on banks, employment and growth while giving a gentle reminder of Europe's purpose and fundamental achievement of bringing peace and reconciliation to the continent. Referring to the award of the Nobel Peace Prize, he spoke of the honour for our citizens and institutions and the pride that the way we in Europe live together is recognised by the world at large as societies united in diversity sharing democratic values and human rights. He rightly paid tribute to those who courageously started the work after the Second World War and later worked relentlessly in their own countries to join this common adventure. He said it is our shared responsibility to carry on their work and that we are facing difficulties today but can draw confidence by remembering much more daunting obstacles Europe had to overcome. They had to rebuild a Continent wrecked by violence and dictatorships but they succeeded through courage and statesmanship. The challenge for us all is to maintain Europe as a Continent of peace, progress and prosperity for the future.
It is to be welcomed that the European Council confirmed its determination to stimulate growth and jobs in the context of the Europe 2020 strategy and identified the areas that require greater effort. I welcome the significant progress in implementing the €120 billion financing package of the compact and that in the coming weeks, the European Investment Bank to adopt its €10 billion capital increase with the aim of strengthening its capital basis as well increasing its overall lending capacity by €60 billion. This should lead to additional investment of up €180 billion in the next three years. I welcome the fact that €55 billion in Structural Funds will be mobilised quickly and effectively and that member states will be helped to reprogramme the structural funds to focus on jobs and growth.
The creation of jobs must be our top priority. It is totally unacceptable and unsustainable that over 450,000 people are unemployed. However, there are positives. Our exports are at record levels, up 12% on last year. Agriculture is performing well and has huge potential for growth as we head to implement Food Harvest 2020. The Government's job plan is beginning to work. We have seen very significant investments by major multinational companies as well as by indigenous companies such as the Kerry Group and Paddy Power. The Minister for Jobs, Enterprise and Innovation has ensured that all Departments have a job remit and is successfully addressing the roadblocks to job creation. Our overseas trade missions are particularly successful and our message that Ireland is open for business is being well received worldwide.
The availability of finance for small business remains a major problem. While some initiatives have been announced by the Minister for Jobs, Enterprise and Innovation, such as the microfinance agency, the fact remains that banks are not lending to viable businesses at the level required, despite all the money that has been pumped into the banks. I recently outlined in the House some of the difficulties experienced by businesspeople, which I will not discuss today, but I welcome the recent comments by the Taoiseach that the Government is taking this matter seriously and is determined to ensure that our banks start lending more aggressively to the productive and viable sector. We must continue to work on improving competitiveness and reducing red tape and regulation and review our local authority costs.
As a country we face huge challenges. We have a difficult budgetary situation and are in a bailout programme we want to exit as quickly as possible. Our legacy debt is unsustainable and we must get recognition for saving the banking system of Europe. Unemployment, particularly youth unemployment, is a major challenge. As we assume the Presidency on 1 January, we will have an opportunity to further enhance our growing reputation among member states and worldwide. The Minister of State has an enormous workload ahead of her and has put in a lot of work in recent months in preparation for the Presidency. We wish her well in her endeavours. This is a critical time for Ireland and Europe and we are confident that the arrangements are in safe hands. I thank the Minister for State for her progress to date.
I welcome the Minister of State to the House. I begin by complimenting her on her presentation, particularly in respect of our Presidency and all the ways in which she has been preparing for that. It is good to hear that information, particularly the ongoing work to promote greater equality, social cohesion and inclusion in Europe, areas in which I am particularly interested.
I also want to compliment the Minister for State on her work in assisting the Taoiseach in the recent European Council meeting. In particular, I acknowledge the clarity of her communication with the Irish public during those two very stressful days. It is critical that the public knows exactly what is going on. These are complex issues, as the Minister of State well knows. However, she also knows that complexity should not be a cloak for less transparency. This is why I particularly welcome her support for public discussion and engagement in EU affairs during the Presidency and I will support her in any way possible.
My comments will focus on that two-day Council meeting. The Minister of State provided us with some information on that meeting, which was very helpful this morning. I still want to raise the question of how we should interpret the negotiations that took place during that meeting as well as the various statements that were released. Even with the Minister of State's presentation this morning, I am still left wondering about Germany's position. Are Germany's stance and Chancellor Merkel's statements merely a negotiating position? For example, is it possible that Germany may have accepted that retroactive recapitalisation will happen? That is, as the Minister of State is aware, the breaking of the link between sovereign and bank debt that could help us with regard to our historic debt. Is it attempting to improve the terms on which that will happen? Is it not the case that Germany first demanded that progress be made on the banking union before the ESM could be used for direct recapitalisation and that this was agreed in June, with most states aiming for the single supervisory mechanism to be established by 2013? It now appears that Germany is arguing that the ESM may be not be ready until 2014, raising the possibility that Germany is simply delaying the establishment of the ESM so that it can continue blocking the commencement of direct recapitalisation.
I was very struck by recent journalistic observations on collective EU decision making. Will the Minister of State comment on this? Collective EU decision making has been characterised by a tendency to make commitments only in moments of crisis. In this regard, one should consider the context in which the June bank recapitalisation deal occurred. There is often unwillingness to carry through on such commitments when matters have stabilised, as was a characteristic of the past week. Hesitancy exists over implementation. I am sure the Minister of State is frustrated with this also. It is problematic and can create the conditions for the next moment of crisis in which commitments will be renewed and ignored again.
There were other issues discussed at the meeting and it was great to hear the Minister of State outline some of those. However, as she knows, they were overshadowed in the Irish media reports by the confusion over the bank recapitalisation deal.
There was some discussion on the preparation for the European Union's next seven-year budget, which will be decided at the special summit next month. Britain, in particular, has opposed any increase in the EU budget, but the Commission is asking for €5.9 billion from member states. While it does not appear that the Government has indicated major opposition to the size of the proposed budget, it is possible that negotiations could stall and carry over into the Irish Presidency. This is doubtlessly a point of concern for the Government. Could the Minister of State provide us with information on the Government's stance on the EU budget negotiations?
I listened carefully to the information the Minister of State provided us with on the Council meeting. It appeared that the meeting ignored many of the social consequences of the crisis. That is disappointing given that the Council meeting was, for once, not taking place at a moment of acute financial crisis. We witnessed several events in the preceding weeks that could and should have pushed some of the social issues to the fore. These include the mass protests, strikes and riots in Spain, the protests in Greece and the growing strength and influence of the far-right political movement in Greece. There was some hope that moving out of a state of permanent financial crisis would have allowed leaders time to discuss the resulting social crises in peripheral economies. If the Minister of State has any more information to share in this regard, perhaps she might provide it to us. Has there been any discussion on the social effects of the crisis? When might there be a discussion on this? The European Union is a union of economies and societies. How can the link between society and the economy be made visible to citizens?
I welcome the Minister of State, Deputy Creighton, to the House to discuss this important issue.
Reference was made to the joint communiqué issued by the Taoiseach and Chancellor Merkel at the weekend. It was the source of much media commentary, including by fellow politicians in both Houses. In the communiqué, the commitment of 29 June by the Eurogroup to examine Irish bank debt with a view to further improving the sustainability of the bailout programme was reaffirmed. The reality is not in accord with what those in opposition, specifically the leader of Fianna Fáil, said on this matter. The recent political poll has gone somewhat to the head of the leader of Fianna Fáil because he missed the point entirely. This matter concerns Chancellor Merkel's statement on the Spanish debt. I would have believed that an experienced leader such as Deputy Martin, who was a Minister in previous Administrations, would at least have analysed the document issued by Chancellor Merkel before he dived in to make his comments. However, the chance to engage in political opportunism is never lost on Deputy Martin. The reality remains that what one leader said at a press conference and what 27 agreed to do at the formal European Council meeting are different. The joint communication cleared that up. Ireland is a special case and it is meeting its commitments. The Eurogroup will take this into account.
While there is concern over the pace of movement on a debt deal, most politicians in the Oireachtas understand that trying to achieve consensus among the member states takes time. For this reason, I welcome the deadline of 1 January 2013 for the setting up of a framework that will give the ECB power to intervene regarding any of the eurozone's 6,000 banks. This is a considerable development and should safeguard Europe and its citizens from having to endure again a crisis as difficult as the one we are experiencing.
I offer the Minister for Finance, Deputy Michael Noonan, my sincere best wishes in the negotiations that will take place, especially on legacy debt and the promissory note. While it is easy for the Opposition to criticise and trivialise the pace of negotiation, it will be well aware that negotiations and agreement, especially an agreement as sensitive as the one in question, take time.
I spent almost seven years as a member of the Committee of the Regions, the local government arm of the European project. I noted at first hand the difficulties that arose when dealing with such a large body of representatives, now representing 27 states, and the concerns over the slow pace of negotiation on issues pertaining largely to local government. The fiscal crisis is the most significant issue that the European Union has ever been required to deal with and the people we are sending to negotiate, including the Minister of State, Deputy Creighton, know what they are doing and will do a good job. They are doing a good job.
I find it very difficult to accept the criticism coming from the main Opposition party given that, just some years ago, that same party landed this country in its current circumstances. The Taoiseach, the Tánaiste and Ministers are forging very important alliances across Europe with countries and partners who are sympathetic to the Irish cause. This was evident on Monday in the outcome of the meeting between the Taoiseach and President Hollande. Just yesterday, the Taoiseach was named European of the year. The award will be made at an event to be attended by more than 100 political journalists, representing approximately 120 publications. I hope that, after this kind of development, there will be deeper understanding among the German electorate of Ireland's special position, as referred to in June.
The Minister of State's outline as to what will happen was brief because she did not have time to go through everything. However, I welcome most sincerely the efforts that will be made by the Government during its Presidency, particularly through the conferences on youth employment and mobility. I welcome also the efforts to fix, once and for all, the debt problem in the State and across Europe.
On the last occasion on which the Minister of State was in this House, I spoke about the upcoming Presidency, which is now much closer. I emphasised to her that, during our last Presidency in 2004, there was a disgraceful display of largesse and a waste of money. Wealth was being flaunted by driving around in fleets of Mercedes cars, for example. I do not want to see that in the next six months. I ask the Minister of State to bring this message back to those who are organising the six month Presidency. Respect should be had for the current circumstances of the country. Delegates who are brought here should be given an Irish welcome and treated properly, but the noses of the citizens of Ireland should not be stuck into this.
I welcome the Minister of State and I am delighted to have her here. I am particularly pleased to have somebody here who was close to all of the action that took place in recent weeks. I also have a spy in the area. As Members will know, my daughter lives in Paris and she met the Taoiseach during the week. She told him about the high regard that he is held in. It was evidenced by President Hollande when he spoke highly of the Taoiseach and the possibility of striking a deal. His words give us confidence.
There is no such thing as a free lunch in business or politics. Will a deal - whatever it will be - cost us our freedoms and result in a federalised Europe? Is there a danger that a federalised Europe will be created? Can we benefit from a federalised Europe? What dangers are posed by a two-tier Europe which has us on the lower tier? I would be glad to hear the Minister of State's views on the subject.
I will concentrate on the other big development at the EU Council meeting. There was a political willingness to ensure that there is a stable banking system in the entire EU. The creation of a banking union would be a big step towards overcoming the European Union's debt crisis. The European Union leaders advanced towards establishing a single banking supervisor for the eurozone as the first of three pillars for the banking union. It was agreed to start phasing it in next year and it would become operational in their words "probably in the course of 2013." EU officials said that all 6,000 banks - I am impressed by the number - in the euro area would gradually come under the supervision of the European Central Bank by 2014. Banks would receive State aid first and then large cross-border institutions. Most day-to-day oversight would be delegated to national bodies. For the Germans, the direct supervision by the ECB should apply only to banks that present a systemic risk while other financial institutions should be supervised by national authorities. However, the ECG should have the right to supervise if an anomaly is detected. Given the strange happenings in the banking system in recent years I wonder does that include Irish banks as well?
I am particularly interested in a statement made by the Czech Prime Minister last week. He said that his country is prepared to block the creation of a single supervisory system for the European Union's banking sector. Is the Minister of State aware of his statement? Does she see such a development as a problem? For example, the Czechs want to ensure that their national bank would be involved if a western European bank decides to transform a Czech subsidiary into a branch. That would remove a new branch from the supervision of the national bank in the host country.
There is still uncertainty about when the European Stability Mechanism - the eurozone rescue fund - will be permitted to recapitalise banks directly. A development that depends on what they call the effective supervisory system being put in place.
Can I have an update on the €120 billion compact for growth in jobs that was adopted in June and put forward by France? It was aimed at breaking the cycle of austerity. Do Members remember it? Only a few months ago President Hollande made the proposal and, in a document released before the summit, Commission President Barroso mentioned that the compact would be launched in 2013 at the latest. The summit mostly focused on banking supervision. Can the Minister of State give us some idea of when the stimulus package might be implemented? How will it support projects in Ireland? What projects will benefit? There have been indications that structural funds have been reallocated to protect bonds and finance transport, telecoms, digital and energy infrastructure but the specifics are vague. I would be glad to get some more information on the matter from the Government.
The Minister of State had been helpful today. Perhaps she will comment on a view provided, on 22 October, by the Financial Times which states:
Mr. Kenny faces a conundrum ahead of Ireland’s scheduled exit from its bailout at the end of 2013. With gross debt creeping up to 120 per cent of gross domestic product and economic growth stalled, does he tell the EU the country’s debt is unsustainable and demand early help? Or should he continue to promote the Celtic comeback story and hope Ireland’s EU partners decide to lessen its debt burden?
Are we playing a risky game? If we do not get enough relief from our debt are we back to square one? What are our other options? These questions will not be answered this week and probably not next month. We need answers and the sooner the better.
I welcome the Minister of State and congratulate her on her appointment as Vice President of the European People's Party, EPP.
I wish to discuss three issues. The communique between Chancellor Merkel and the Taoiseach is significant because it acknowledges Ireland's unique problem of legacy debt. Will we have a legacy debt deal before we take over the Presidency of the European Union? The Minister of State knows that we must be magnanimous when we hold the role and it would be seen as selfish if we pursued out own goals during the period. I realise that the supervisory mechanism will only come into play "at the end of this year." Does she think that we can strike a deal before then?
Last week I attended a COSAC meeting hosted by the Cypriot Presidency. One of the things that I learned was that if Ireland and all of the EU countries implemented the services directive Europe would grow, and each country would grow, at a minimum of 2.4% GDP. How are we doing? Has Ireland progressed? The directive would allow businesses to be easily established here. It would also allow Irish people to establish a business in another country without setting up shop there. What about the digital agenda? Has Ireland implemented e-signature and e-invoicing?
I have already mentioned that matter.
Such initiatives would make life much easier for businesses. I also apologise for being away from the House last week.
My final question is on the five targets for Europe 2020 which I am excited about. The first target is for 75% of 20 to 64 year olds to be employed by 2020. The second target aims to have 3% of EU GDP invested in research and development. The third target deals with climate change. The fourth target is on education and aims to reduce school dropout rates to below 10% and to have at least 40% of our 30 to 34 year olds compete third level education. The Irish drop out rate for students before the leaving certificate is 16% The fifth target is to have at least 20 million fewer people at risk of poverty and social exclusion across the Union. How is Ireland doing with those five targets? Who is monitoring them? Will there be an annual report produced on each target? Will the education target come under the remit of the Minister for Education and Skills? By 2020 Europe will be a better place - and that is the whole point of the EU - if we work together to achieve the targets. Economic growth would also increase across the Union. Each country needs to work on those targets and I am keen to hear how Ireland is doing.
I welcome the Minister of State to the House.
In common with contributors on all sides of the House, I commend her, the Taoiseach and the Government for the initiatives that I hope - with fingers and toes crossed - are beginning to bear fruit.
The Minister of State is entering a challenging time, namely, her first Irish Presidency. As she outlined, one of the main priorities will be to stimulate growth and to address the challenging issue of unemployment. These issues are foremost in most people's minds, irrespective or despite of the high flowing economic talk about bank debts, sovereign debts, etc. Most Europeans will be focused on creating jobs and reducing unemployment rates.
Sunday was a good day for the Taoiseach. It showed that Ireland has traditionally been capable of building alliances despite our small size. It is obvious that the rapport between the Taoiseach and Chancellor Merkel resulted in Sunday's statement, but it is vague about what will occur next and does not indicate whether the European Stability Mechanism, ESM, will be allowed to take equity stakes in Irish banks or at what value. The Government should clarify whether the State is seeking to sell its stakes in the banks to the ESM.
I read a speech made at a conference last week by the Secretary General of the Department of Finance, Mr. John Moran. He stated that, when the previous Government introduced the State guarantee of the banks in 2008, it took on an exposure of €375 billion and that the amount had decreased to approximately €90 billion. It is still too high and is a drag on our finances. All of us, even economists of diverse views, accept that the bank debt is unsustainable and must be removed from the sovereign. Positive news is that the banks are close to functioning without the State guarantee of deposits.
What is the Minister of State's interpretation of the events of the past week? The best way to handle the promissory note is to extend the period at a low interest rate, for example, zero coupon bullet bonds. This would have a decreasing effect on the annual requirements of fiscal policy. While this is a statement of the obvious, are these the types of approaches that the Government considered? What does the communique mean exactly? As some economists have stated, it is not enough to point to Ireland as a model pupil, the best boy in the class or a special case. That the statement issued in Ireland was not issued to the German media seems to suggest that a two-handed game is being played - Angela Merkel is looking to domestic considerations while issuing platitudes to Ireland's special case. These doubts are spreading in people's minds, irrespective or despite of what one would be churlish not to acknowledge has been a positive week overall.
I wish the Minister of State every success in taking on the challenging role of representing Ireland in the EU Presidency. On the basis of her experience to date, she will rise to the challenge and Ireland will have another successful Presidency. We have a long tradition in that regard.
I welcome the Minister of State and congratulate her on the great work she is doing with the Taoiseach on behalf of our country in Europe. The Taoiseach was awarded the title European Person of the Year.
Five committees from three main political groups will visit from the EU. I had the privilege of speaking in Brussels at a large conference on renewable energy. A Senator mentioned the issue of energy. Through the auspices of the Seanad and with the help of the Leader, I used that occasion to ensure the conference would be held in Ireland during our Presidency. The office of the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, has given its approval. According to the Minister, the event certainly appeared to fall under the category of events that Ireland would be delighted to be associated with during the Presidency and he would be happy to ask the Presidency co-ordination unit to request formal approval from the Taoiseach. The Taoiseach has given me his verbal approval and I am awaiting formal acknowledgement. I also thank the Minister of State, who will afford me her help following my mention of the conference last week. The conference organiser, the European Forum for Renewable Energy Sources, EUFORES, is funded by the EU and will not be seeking funding from Ireland. I will not go into the detail of how important renewable energy is to Ireland. Perhaps the Leader, someone from the Minister's office, someone the Minister of State recommends and I could meet those groups to tie everything together. This is a bottom-up conference from the Seanad, as it were. I suppose as this is the Upper House, maybe it is from the top down.
It sounds better than "bottoms up".
The conference will number MEPs, MPs and so on from across Europe. We will work with the Ceann Comhairle to organise debates in the Dáil as well. The Minister of State mentioned that her offices will be available.
Senators have discussed the Government's success in guaranteeing a commitment towards Ireland as a special case. I congratulate the Minister of State. Given the level of importance, we must not be critical of Ireland on the European front. We are all trying to do our best. I welcome the fact that Chancellor Merkel and President Hollande have issued a joint communique with the Taoiseach. We must pull together and give the country as much help as possible on the international stage instead of looking for holes from which to pull rabbits. People should try to find the positive aspects.
The Minister of State mentioned the professional qualifications directive. I am a member of the environment committee, which is debating architects' qualifications under the Building Control Act 2007. I do not want the Minister of State to answer now, but perhaps I will contact her office to determine whether they are covered by the professional qualifications directive.
I welcome the Minister of State. It is a genuine pleasure when she attends the House to discuss the European project. I applaud her work in that regard. I welcome the Taoiseach's award as the European Person of the Year. What distinguishes him from the other Europeans in the competition is that he is not a waffler. In comparison, Brussels and Frankfurt are filled to the roof with waffle, complacency and non-performance. I hope that a signature of our Presidency will be to wake up the EU's bureaucracy, which is not serving citizens. It issues communiques at 3 a.m. while there is a 50% rate of youth unemployment in Spain and Greece. Shaking the EU out of its slumber, complacency and cliches should be the Irish Presidency's goal.
I agree with Senator Landy, in that we should have less grandstanding. Commissioner Van Rompuy and his colleagues have failed miserably the Continent that they are supposed to serve. It needs the breath of fresh air that the Taoiseach has brought to Ireland. I hope he will bring it to Europe. Europe is not working. The currency has been a disaster and restoring confidence in it will be impossible unless its design faults are tackled immediately.
The indifference of Brussels, in particular, to the amount of misery it has caused up and down this continent is bizarre to behold, and there is a major democratic deficit. They are all out of touch with reality. There have been 25 summits, with press releases at 3 a.m. filled with obfuscation. Some of the people ought to get real and see what has been happening in the real world. A successful free trade area has been turned into an extra layer of bureaucracy, many air miles and not much else in results.
I will refer to some of the issues mentioned by the Minister of State. I agree that we need more democratic engagement. Some of the leaders in Europe would not be elected to a county council because they are so unpopular and out of touch with reality. We must deliver results for European citizens and restore trust in the euro area, which was designed badly, and very little has been done to repair the damage. The Minister of State indicated that more needs to be done and I agree absolutely with that point. She pointed out that there is vital work being done in examining the position of the Irish financial sector, which has been broken for four years because we were not protected against the tsunami of bad debts. That was because the euro was badly designed. We should have put those mendicant bankers on the plane back to Frankfurt on 29 September 2008.
We must break the connection between banking and sovereign debt. There is very little democratic legitimacy and accountability in Brussels, which is one of the problems mentioned by the Minister of State. She also mentioned 70 pieces of implementing legislation with regard to the multi-annual financial framework but that is part of the problem. We never seem to get to grips with the issue because we get more bureaucracy and pieces of legislation. There is 50% youth unemployment in some countries and 25% total unemployment in some others. I gather Brussels wants a 4.8% increase in its budget but it is very difficult to defend that, given how it has been asleep at the wheel during these crises.
With regard to skills, €1 billion was put into FÁS annually when there was 4% unemployment, or full employment. Separately, Portugal got vast amounts of money for its infrastructure. Brussels needs a council of economic advisers to ensure its policies are more than aspirations. There should be some measurement of results, and Europe is very bad at doing it. The Minister of State has indicated we will play a crucial role in developing EU-US trade relations in Dublin in April. We are strategically placed because of our contacts with the United States and Europe to perform a very important role, and I wish the Minister of State every success in that regard.
We need a different kind of European Union as the current version has failed its citizens. It is up to us to change it during our Presidency and I hope the Taoiseach and the Minister of State will be the vanguard of that process.
There are approximately four minutes left for two speakers. Since I arrived every speaker has exceeded the allotted time.
I may follow that lead. I welcome the Minister of State to the House. It is now four months since the summit of 29 June, when a statement was published that included a reference to Ireland. It is important in the context of this debate to remind ourselves of exactly what was stated. It read:
The Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme. Similar cases will be treated equally.
Nowhere in the statement is there mention of legacy or banking debt. In truth, the statement was bland and a good example of constructive ambiguity that seemed to suit everybody, from those in Germany who were clearly hostile to any notion of a banking deal to the people in this country who were able to return home and oversell the statement. I agree with Government representatives in that we need to put on the Irish jersey and get behind the Government to get a banking deal. Nevertheless, it must be about ensuring there is a separation of private banking debt from sovereign debt. We must lift the burden of that debt from the taxpayers and ensure the action is retrospective.
Nothing in June's statement or the communiqué issued either by President Hollande or Chancellor Merkel makes any reference to legacy debt or having a deal that would ensure the separation of banking debt from sovereign debt. Why is it so difficult to hear from the lips of Chancellor Merkel in very clear, simple, unambiguous language that this process will deal with legacy debt? Would that not lift any suspicion that there is no deal and give us the clarity we need? It would be good for the people and the economy, as there would be a positive reaction in the markets. When we get that kind of commitment from Europe, we can be more positive. Nevertheless, I agree that we must get behind our negotiating team, despite the fact it came very late to the party in even wanting a deal on banking debt. Had the Spanish not taken a very strong stance, we would not even be in our current position.
The Presidency is an opportunity for all of us to look forward in a positive way to what Europe can do with the real issues in this State and Europe. Topics were raised relating to energy, etc., which are important, but jobs and dealing with the unemployment crisis is the big issue. We must consider a change of direction away from the policies that got us into this mess towards policies that will grow the economy in Europe. I hope that employment, job creation and an emphasis on youth employment, given the high levels in the likes of Ireland, Greece and Spain, will be the central planks of the Presidency. If that turns out to be the case, the Government will get the full support of my party and, I am sure, others across the House. That will help to ensure we have proactive policies required by Ireland and Europe to get us out of the very dire economic mess we are experiencing.
I will mention some technical issues that I hope we will have the chance to address and perhaps direct some oversight on during the Irish Presidency. There is a data protection directive coming from Europe and I will attend discussions in Brussels next week about possible research implications. I will mark the card as there are serious concerns it could affect certain types of cancer research which involve accessing stored tumour samples and records of often long-dead patients. This research could provide clues and insights into improved treatments for living and future patients but it could become difficult or impossible if the directive is not substantially amended. One of the problems is that consent cannot be gained from people who are deceased to use what may be very valuable research specimens. I ask that this be put on the agenda at the highest levels.
There was almost a fiasco ten years ago with a clinical trials directive, which nearly killed all non-drug company funded clinical trials in Europe. If it had been a regulation rather than a directive, such research would have been eliminated; as it was a directive, there was considerable latitude in implementing or ignoring it. A regulation will come out in the next year or two and it is important that the Government and the Minister for Health exercise some oversight and alert those in Europe.
The next issue is also health-related. I would like the Government to consider during its Presidency collaborating with an initiative that I am rolling out this week. It is a call to stamp out all commerce in tobacco within the EU by a fixed and defined future date, either 2025 or 2030. The basis for this is obvious as people should not be allowed to do commerce in a cancer-causing addictive toxin. It is just wrong. We understand there would be a need for divesting of pension plans, retooling factories and reformatting of agriculture. Addicts would also have to be given great warnings. This is not something to be done immediately or a ban on smoking. Although it does not make smoking illegal, it would make it illegal to do commerce for profit in tobacco.
Will the Minister of State indicate if sufficient attention is being paid to the circumstances of the recent unusual resignation of Commissioner Dalli, who was responsible for health matters? He was known to be campaigning on an anti-tobacco initiative but found himself under a cloud of accusations that he was attempting to be improperly influenced. He denies this and there is considerable speculation that dirty tricks from elements within the tobacco industry are involved. Is attention being paid to the issue in the corridors of power? It could be relevant in the next six months during our Presidency.
I am not sure how long I have. As I was told statements would end at 1 p.m., that would give me one minute. As I am under pressure, maybe on the next occasion-----
We will give the Minister of State six minutes.
-----we can try to discuss the timing before we kick off. It will be impossible for me to respond to all the issues raised and I am disappointed. This is not the first time it has happened in the Seanad but I apologise in advance. It would be useful for me to respond to the points made. A number of questions were raised and I will try to address them.
Senator Leyden asked whether the College of Commissioners would visit Dublin in advance of our Presidency. The College of Commissioners will visit Dublin on 10 January next and all members of the Government will be involved in that. In addition and quite interestingly, the European press core will come to Dublin between 8 and 10 January next and that will be a very important opportunity for us to sell Ireland, not only our Presidency and the priorities, but also the country and what we have to offer. It is a good opportunity to sell soft focus pieces in newspapers and different publications all over Europe and not only in Brussels. They are two key events at the beginning of the Presidency.
There were questions in regard to the political groups. The three key political groups will be in Dublin in November and I will meet all of them. We are in the process of finalising itineraries for each of those groups, ensuring they have access at the highest level to Ministers, the Taoiseach and the Tánaiste. Again, that will be a good opportunity for us to ensure they are fully up to speed on what we are doing and the opportunities that present.
Senator Leyden also raised a valid point in regard wind and wave energy. It is part of the agenda in the context of sustainable growth and job creation. There will be a significant event in the Marine Institute in Galway during the Presidency. We are very much taking that into account. In regard to his point on the role of the Oireachtas in scrutiny, the Senator know my views on this, which I have repeated in this House many times. I am very pleased to hear the Leader has taken those comments on board and that we will move forward in the new year. As it will tie in extremely well with the beginning of our Presidency, I am and will continue to be very supportive of it.
A number of Senators raised the issue of the joint communiqué between the Taoiseach and Chancellor Merkel and, needless to say, I agree it is a positive step. Obviously, a lot of work has to be done on the precise details of what an agreement on reducing Ireland's will look like. This is a process of negotiation and I cannot tell Senators what the outcome of it will be. It is certainly important that we entertain all options on the table and that we go with an open mind and with a clear idea of what we want to achieve in terms of Ireland's debt sustainability, which we are doing.
The Eurogroup of Finance Ministers has been mandated to take that process forward. While one can say that the Council conclusions or the communiqué are not prescriptive in terms of what the format of a deal should look like, it is very clear that responsibility has been delegated, at least for the time being, to the Finance Ministers and they must come froward with proposals. I expect that, in due course, they will go again to the Heads of State and Government. That is the way these things work and that is ongoing.
I think Senator Healy Eames asked if it would be done by Christmas. I said in my introductory remarks that we want to ensure we get the best possible deal and we cannot be prescriptive in terms of timing because, of course, it is always giving hostages to fortune. Maybe some Senators might like if I said it had to be done by a particular date and then it is a great big failure if it does not happen by that date. I will not give hostages to fortune. All I can tell Senators is that we are working literally day and night. I am spending an immense amount of time travelling from one capital to another in preparation for our Presidency but using the opportunity to explore with all our colleagues from all members states, big and small, what we want to achieve for Ireland in terms of debt sustainability.
In terms of the timing, of course people like clarity and a clear timeline but, on the other hand, the important thing is that there is confidence in the market that we will get a deal. We have seen that in recent months in that the cost of Irish borrowing has come down quite significantly. That is a direct result of the agreement that was achieved in June. There is an expectation that there will be an arrangement for Ireland.
Linked to that, in terms of our capacity to get back to the markets, is confidence that the Government is taking the necessary steps. There is the external factor in terms of the European Union but there is also the domestic factor, which is equally important. We have built huge credibility in the past 18 months or so in terms of what we are doing domestically. We all know it is difficult and painful but it sends a very clear signal to our partners at European level and at a broader global level that Ireland is serious about what it is doing and that it is reducing spending and is getting it under control and, ultimately, it is taking responsibility for its own finances, of course with some guidance and some encouragement from the troika. Those decisions are not being shirked by the people, Parliament or the Government. That is really important.
Some tangible evidence of that is that the day before the summit, when it looked like there would not be an agreement on a timeline for bank supervision - in fact, everybody was predicting that the whole process would collapse without any timeframe for that - we still managed to sell €500 million worth of treasury bills, which shows there was still confidence in Ireland even though there was doubt over the potential outcome of the summit. We have seen over the course of the past five or six months repeated successful interventions in the markets by Ireland.
Senators might recall that, when we were discussing the fiscal treaty in this Chamber and in public debates last spring, we were talking about a funding cliff in 2014 and that we would have to turn over or roll over about €15 billion worth of debt. That cliff has now basically disappeared not by magic, but by the fact that the National Treasury Management Agency has been able to go repeatedly to the markets selling treasury bills and, more recently, selling bonds.
The process is under way. This is not just a desperate attempt to get back to the markets next year. We have already eased that process and made it more manageable. The prospect of a debt deal also inspires confidence in the markets. If we deliver on a debt deal, that will reduce the 121% debt to GDP ratio, which Senator Quinn spoke about, next year. That will make Ireland look like a much safer bet. All in all, it is going in the right direction, although that is not to at all underestimate how important it is that we get that debt deal ultimately.
Senator Mullen referred to the Nobel Peace Prize which is something worth reflecting on. I completely disagree with Senator Barrett in his castigation of the European Union that it is an abject failure, that it is a failed economic entity, etc. I do not agree with that. If one looks at Ireland's experience in the European Union, notwithstanding the difficulties we are experiencing, when we joined our GDP per capita was less than 70% of the European average but it is now about 120%. Times are difficult but from the point of view of Ireland's economy, it has been a success story.
A few weeks ago I was in Serbia, Kosovo, Albania and Macedonia in the Balkans. These countries can tell one something about poverty and hardship. I met their Prime Ministers and European Integration Ministers and the first thing they said to me very clearly was that they wanted to join the European Union. It is their number one priority. They are even talking about joining the currency union, notwithstanding the difficulties we are experiencing in the eurozone.
I fully agree with the point the Senator made about the flawed architecture of the euro currency and the challenges that exist because we did not create a sustainable architecture and did not create an economic union when we created monetary union. The EU has come on in huge strides over the past two years in terms of putting in place the kind of economic governance, economic management and co-ordination that is needed to underpin our currency.
I acknowledge we have further to go. We must create the banking union, which the Government considers to be paramount. However, we are getting there and while it is easy to simply assert the European Union is some sort of failed experiment, I fundamentally disagree. I was in Strasbourg yesterday and with a number of MEPs had the honour of attending a war memorial in the Alsace region in the morning. When one considers a continent that was riven and in which more than 60 million people lost their lives, we have much to be proud of in the European Union. No one pretends it is flawless or that we do not face difficulties and challenges. However, the bottom line is we sit around the table with 27 or 28 member states, hopefully soon to be 33 or 34 member states to solve our issues, disputes and difficulties, as well as our differing national positions, through dialogue and consensus rather than by warfare, be it on the field of battle or economic. I am much more satisfied to be where we are at present than with the alternative and I feel very strongly about this.
Another question that was raised concerned the availability of funds for small and medium-sized enterprises, SMEs. While that is a domestic question for the Government, it also is a question with which we are trying to deal on a European level. Sometimes we talk about landing fish in terms of the Presidency. In other words, the dossiers we can complete during the Presidency are the fish we can land and one of these is the programme for the competitiveness of enterprises and small and medium-sized enterprises, COSME, which is an important and exciting programme that will enable SMEs to access funds. I am confident that under the stewardship of the Minister, Deputy Richard Bruton, we will conclude that item during our Presidency. This is just one aspect or dimension at the European level where I believe we can make progress.
Senator Zappone asked a range of questions to some of which I probably already have alluded. The question of communicating during the Presidency is really important and the forthcoming European Year of Citizens planned for next year presents us with a major opportunity. A major programme is in planning at present to involve people at grassroots level all over the country in a dialogue on the future of Europe, as well as for all sorts of cultural events that will promote engagement and partnership between Ireland, communities in Ireland and other countries. While I have more information to hand on it, I do not really have time to get into it now. However, I will happily send a note to be circulated to Members of the Seanad to explain a little more about that initiative. As for whether the German position is a negotiating position, of course it is. The position of each member state is a negotiating position and we have a real difficulty in this regard. There is an obvious division in approach at European level as the so-called creditor countries are fearful. However, if we cannot appreciate how fearful they are, there is something fundamentally wrong with us. Taxpayers in Germany, Finland, the Netherlands and other countries are fearful and we must appreciate this. Bullying or stamping our way around the table is not the way to assuage their fears or to bring them around to our way of thinking. We already have managed to bring them around to our way of thinking in many respects. For example, the banking union was not on the table until last June. It is something the Taoiseach proposed at a conference I organised in Dublin Castle last April. He was one of the first Heads of State and Government to talk about it and it now is a very real prospect. We are not simply talking about it but are taking concrete steps to achieve it. Consequently, we must appreciate that people must evolve to our way of thinking and we must help them to do that. Again, the best way to so do is through dialogue and negotiation. It is the reason the Taoiseach was in Paris this week and the Tánaiste will be in Berlin later this week. It is the reason the Taoiseach will be in Berlin next week and is the reason I will travel to Stockholm and Tallinn on Monday and Tuesday. It is the reason I attended the European Parliament, which is an important player in all this, for two days this week. Moreover, the Government will continue this round of diplomacy, which I believe to be reaping rewards for Ireland.
In response to one specific question about Germany delaying the creation of the bank supervisory mechanism until 2014, I refer to a crucial point from the conclusions of the Council meeting of Thursday and Friday of last week. First, we have a date to put in place the legislative framework, which is the end of this year. While this is something everyone speculated could not happen, it is happening. Second, the operational aspects will be in place in 2013. I acknowledge it is not specified whether it will be the first three months or the first six months but it will be during 2013, which also is an important statement. Consequently, I expect the bank supervisory mechanism will be up and running by the end of next year, that is, before 2014. Realistically, I believe this is as fast as this can happen. This is a big deal and a major step and putting in place the legal framework first will be difficult. As for the operational capacity, the simple things such as the building, the people, who will work there and who will run it are questions that take a little time and do not simply happen overnight. I consider it to be a reasonable expectation that by this time next year, we will be very close to completing the process. This will then pave the way for the ESM to be used for direct recapitalisation and, crucially from our perspective, for all the other elements of banking union we seek. I believe we are well on the way.
I note I am way over time but there were a few questions on the multi-annual financial framework, MFF. I must revert to the other questions at some other point but on the MFF, the Commission proposal is for a budget of €1.03 trillion, which is a figure we support. The Irish position is supportive of that figure because the Government knows the alternative is something much lower. All of the European Union benefits hugely from the budget but Ireland benefits in particular in the area of the Common Agricultural Policy. As 85% of our receipts come through the CAP, we have a clear national interest in defending the CAP and in defending our share thereof. However, it is no secret that certain member states - I believe Senator Zappone mentioned the United Kingdom - wish to significantly reduce the budget. We do not share that view and consequently are supportive of the Commission proposal, if not all aspects of it, certainly the total figure. Moreover, we are working very hard to ensure there will be a compromise of which we are hopeful, which is much closer to the aforementioned figure than to a figure that might be proposed by the United Kingdom. This forms part of the discussions we are having with our European partners. The Taoiseach will discuss it with the Chancellor next week. I will be discussing it in all my discussions with other member states and it was a key focus of my consultations in the European Parliament this week, as it has been for some time. An interesting point on the MFF is that since the Lisbon treaty, it requires the consent of the European Parliament, which makes the latter a hugely important player in all of this. Consequently, I have invested personally much time with the rapporteurs in the European Parliament who are responsible for the MFF. They attend informal meetings of my Council, that is, the General Affairs Council, have regular contacts with the Presidency and are a very important player in all of this, as are all the member states.
Senator Barrett also raised a question about the MFF in respect of the 70 legislative measures. There is no way in which one can have policies without a legal framework. One can brand it as more European bureaucracy or one can describe it as part of a democratic process whereby legislators, directly elected MEPs and representatives of all the governments, including the Irish Government, take decisions on shaping policies that are of vital national interest to each and every one of us. I do not perceive that as bureaucracy but as a vital part of the legislative process and as a democrat, I support that fully. During its Presidency, Ireland will be leading those negotiations on the aforementioned 70 dossiers, which include the CAP reform, the fisheries reform and cohesion. They include Horizon 2020 and all the research and development measures, all of which must be legislated for. They do not simply appear but must be legislated and it is a process both of democratic accountability and transparency and an opportunity for each and every Minister who will be engaged in that process to represent our national interest, as well as the overall European interest. There is much more I should get to but I do not have time.
On the energy conference being organised under the auspices of the Seanad and the office of the Minister, Deputy Rabbitte, can the Minister of State lend her support on the record?
I have stated my support.
I thank the Minister of State.
Unquestionably, we will happy to work with Members in that regard.
We are 15 minutes over time and I suspect the Minister of State also is under pressure. I thank the Minister of State for her attendance and her detailed response.
When is it proposed to sit again?
On Wednesday, 7 November 2012 at 2.30 p.m.
The Seanad adjourned at 1.20 p.m. until 2.30 p.m. on Wednesday, 7 November 2012.