I have great pleasure in welcoming Mr. Gay Mitchell, MEP. It is a great honour that he has come to the House. I would like him to address the Seanad. He has 20 minutes in accordance with the order of the House.
Address to Seanad Éireann by Mr. Gay Mitchell, MEP
Mr. Gay Mitchell
It is a great honour for me to be invited to speak in the Upper House of our national Parliament and I appreciate the opportunity. In the European Parliament we are used to getting straight to the point because usually we do not get to speak for as long as 15 or 20 minutes, but I have some comments to make and have condensed them. I hope to address the role of the European Union, with particular reference to economic affairs, Third World issues and marking the 40th year of Ireland's membership.
In speaking about the role and history of the European Union I hope to show that there is cause for optimism, not pessimism, that solidarity is essential and that inter-dependence is the key. I acknowledge that there are many people in Ireland who are being left behind and others who cannot make ends meet. This is something we must put at the centre of our concerns. We will get out of our predicament, but there will, naturally, be economic downturns in the future. The difference next time will be that the European Union, including Ireland, will have put in and will continue to put in foundations that should have been put in place in the past. Future recovery which is well on the way will be more sustainable.
Therefore, recovery will last longer and future challenges will be capable of being met. Europe stared into the abyss of economic instability and has pulled back from the brink. We are managing the crisis but much work remains to be done to sustain the momentum and prevent slippage.
The reality of that progress is not immediately evident in an overview of the current state of the economy. Ireland's debt-to-GDP ratio should be a maximum of 60% and it was, at one time, as low as 25%. It is now almost 112%, some of which is due to socialising bank losses and some to long-term spending commitments set against short-term cash inflows which dried up. The interest we pay on this debt is enormous, but we were given some protection from the market rates by EU assistance and paid a considerably reduced rate of 3.3%. In addition, the European Central Bank supplied up to €160 billion in liquidity funds at an interest rate of 1% or less to keep the economy afloat. We in Ireland continued, in 2012, to spend €15 billion more than the Exchequer took in, thus adding to an already unsustainable debt. By moving to bring our annual budget into balance, we stop adding to debt and this, in turn, restores international confidence in order that recovery will follow, the economy will grow and the debt-to-GDP issue can be solved by growth, as it was in the 1990s. Furthermore, to help get our budget into balance, Ireland must and I believe will get a rescheduling of the Anglo Irish Bank-Irish Nationwide Building Society promissory note. Clearly, we have much to do to make society a better and fairer place. While looking to greater solidarity within the European union, which is a two-way street, we also need greater solidarity at home. What is truly shocking is the fact that many people remained dependent on the Society of St. Vincent de Paul at the height of the Celtic tiger years.
As the Second World War came to an end, there was general revulsion at the damage that war had wrought on the continent of Europe and the way in which Europe's rivalries had embroiled the rest of the world with appalling results. A number of national statesmen realised that Europe could not be rebuilt the way it had been. Europe was losing its colonies and its world standing was reducing as the United States of America became ever more dominant in the world order. This was happening against the immediate backdrop of a threatening, armed and belligerent Soviet presence in half of the continent. The instigators of European integration all shared the same desire for the pacification of Europe, not through a system of power balances but by the reconciliation of European nations.
Today we are marking the 40th anniversary of Irish membership of the European Union. As those of us who were around then can recall, the debate about accession transfixed the country - I might mention in passing that I was only a baby on my mother's knee at the time. Why did Ireland join the European Economic Community, EEC, as it then was, in 1973? As with all such events, there are a number of complex reasons. Ireland was extremely dependent on agriculture, with more than 30% of its working population engaged in farming and many others depending on the food processing industry. Both agricultural and industrial exports were dependent on the British market and when the United Kingdom decided that it would seek to join the Common Market there was concern in Ireland that access to our principal market could be cut off. Equally, the Common Agricultural Policy, CAP, offered a structure to Irish farmers with guaranteed prices for farm produce and given the importance of agriculture and the numbers engaged in farming, this was an attractive option. There was a recognition among policy experts that Irish industry was not in a strong enough position to compete on the basis of free trade but since the Lemass-Whitaker reforms of the late 1950s there was also a sense that the ongoing protectionism which had characterised the early economic orthodoxy of the new State was not working and that Ireland needed to take the risk of entering into a free trade arrangement. At the same time, there was a sense among many that membership of the Common Market would enable Ireland to open out intellectually. The inevitable post-colonial dominance of London could be challenged and Ireland could be opened up to wider influences as it had not been since the 18th century.
In 1983 Greece became a member and in 1986 it was followed by Portugal and Spain. The most significant changes came at the very end of the decade. As the grip of the Soviet Union weakened across central Europe, it was clear that the final days of the Second World War had played themselves out. Enlargement of the European Union to include the countries of central Europe was a fulfilment of the objective of the founders of the European project. The new member states were, in particular, the countries which had been caught up in the wars which had raged through Europe over centuries. The fact that they could be integrated into a functioning, prosperous and democratic structure such as the European Union was a truly historic, if not miraculous, achievement. The Iron Curtain is no more and we have built stability on our continent through interdependence.
Based on the report of the committee chaired by the late Senator Jim Dooge who also contributed so much to this House and the European Commission's White Paper on Completing the Internal Market, the Single European Act was negotiated and agreed so as to reduce remaining protectionism. It is based on four freedoms, namely, the free movement of people, goods, services and capital, all of which are underpinned by a strong competition and consumer policy.
The introduction of the euro was the logical consequence of the development of the Single Market. No market of this nature could function without the elimination of the risks and costs involved in variable exchange rates. The need for stability of currencies is central to the success of a Single Market. The free movement of capital, people and goods is hampered if currencies can be devalued from one day to the next, leading to unfair advantage and trade distortions. The euro brings strengths and opportunities arising from the integration and scale of the European economy and maximises the advantages of a Single Market.
When the euro area was struck by its first serious financial crisis in 2008-09 it was hit twice, first by the level of huge pre-crisis public and private debt overhangs and, second, by an inadequate institutional design that prevented the kind of rapid and nimble responses required. More broadly, the crisis exposed the problems in the structure of the eurozone, which escaped notice in the good times. Measures had to be introduced to strengthen economic governance. It is in our response to the crises that we are building more sustainable progress for the future.
Soon there will be a new form of bank supervision in the European Union, accompanied by bank recapitalisation measures. Ireland must and will benefit from bank recapitalisation. However, if debt as a percentage of GDP is the measure used to monitor all member states, we must have both debt and GDP measured in the same way in every member state. We cannot measure by litres in one member state and by metres in another, so to speak. All of these actions are helping to restore confidence and pave the way for recovery. There remain structural problems in southern Europe and these need to be addressed in a sympathetic way. Solidarity across the European Union is key.
I will now turn my attention to the global situation. Most, though not all, people in economically and politically advanced countries can take for granted those material goods that were once the constant preoccupation and anxious concern of every man, woman and child, namely, adequate food, safe and comfortable shelter, sufficient clothing, basic medicine, productive work and opportunities for leisure. However, progress has created new problems such as the proliferation of nuclear weapons, economic crises, civil wars, ecological disasters and environmental threats. There are also many potential causes of international instability. What is to be the future of Russia, for example? Will it become a social market economy and democracy or an oligarchy? About one third of the European Union's total gas, crude oil and coal imports come from Russia. Approximately 80% of all Russian oil exports go to the European Union.
What will happen in China? Will a middle class grow? Will democracy take root? Will the economic miracle continue? What is the future of India and Pakistan? What is the future of the Middle East after the Arab spring? What will happen in Latin America? The European Union is respected in these and other regions. It has a role to play in building international stability and interdependence. Interdependence is the strength and the objective of the entire European project.
Some 23,000 children die every day in the developing world. The good news is that there used to be 36,000 such deaths every day. The European Union is investing as much as the rest of the world added together to tackle this obscenity. The European Union and its member states are the biggest contributors of aid to the developing world. They provide over 50% of official development assistance. While this is the right thing to do for selfish and selfless reasons, more must be done. By 2050, there will be 2 billion extra people on the face of the earth. Approximately 90% of them will have been born in what is now the developing world. Should we invest in such countries to help them develop? Should we make them our trading partners, or simply our partners? Should we leave a terrible inheritance of potential mayhem and global instability to our children? The European Union, in partnership with developing countries, is striving to address these issues through its assembly with the African, Caribbean and Pacific Assembly and various agreements. Even if this is imperfect and insufficient, it is the just thing to do. There is progress to report. Many developing countries are charging ahead. People are being lifted out of poverty at the fastest rate ever recorded. Mercifully, the death toll inflicted by war and natural disasters has also decreased.
Europe needs to put more emphasis on justice. The social market economy is based on a number of elements. It is not geared towards performance only. It is based primarily on respect for human dignity, free from unwarranted control. Incentive systems that decouple risk and liability contradict the spirit of the social market economy. A market economy which serves exclusively the interests of capital cannot be called social. Global GDP increased by a factor of seven over the first 1,800 years of the common era but has increased by 70 times since. This indicates that the social market economy can bring extraordinary benefits for the common good. This success has been possible because the free economic system has reformed constantly to meet the challenge of the day. It must reform again. It is time to put "social" back into the social market economy.
In his most recent book, Finance and the Good Society, Robert J. Shiller, a professor of economics at Yale University, argues that "it appears that [stock market] price changes in the United States have been mostly due merely to changes in moods or attitudes or something else unrelated to the actual changes in real underlying value". He also points out that US companies fared much better in the Great Depression than is commonly suggested by embellished stories; for example, none of the 30 companies in the Dow Jones industrial average went bankrupt. In general, large US companies did well by lowering their dividend payments for a few years before resuming the trend. Professor Shiller claims that "most financial writers have apparently never heard of excess volatility" and suggests that they continue to write their stories about the day-to-day fluctuations in the stock market "as if the market were dominated by traders with razor-sharp minds and fast computers who have a deep understanding of the economy and grasp the import of every nuance in today's economic news". While he accepts that many traders "do indeed have sharp minds", he contends that "the game they are playing is not generally to involve themselves in macro-economic forecasting" but instead involves "playing a game against each other - a game of guessing each other's psychology". He also suggests "the decline in the partnership structure on Wall Street may have contributed to the severe financial crisis that began in 2007, as it would appear to have reduced the incentives to manage long-term reputation and long-term risks in favor of a structure that encourages rapid growth of the firm". Lehman Brothers was a partnership until 1984, Goldman Sachs was a partnership until 1999, Bear Stearns was a partnership until 1985 and Merrill Lynch was a partnership until 1971. According to Professor Shiller, the "ultimate collapse" of firms such as Bear Stearns, Lehman Brothers and others and the economy as a whole may be related to the changes wrought by the end of the partnership structure.
Putting our economies back in shape is not entirely the responsibility of politicians. Businesses and others must also step up to the plate. The markets invested against the euro expecting to make profits and they lost. They invested against individual member states and lost. Italy, for example, is now getting 15 year money at 4.8% from the markets. There are very few places for the markets to go. It is time they went back to investing in reality. The euro is here to stay. Member states will not be left abandoned. The ECB has the firepower to take on the currency gamblers. Most EU member states need cashflow and confidence. It is essential that we bring our budget deficits under control, rather than continuing to add to our bloated national debts. This approach is bringing and will bring confidence. By contrast, in the 1930s it was every country for itself and beggaring one's neighbour was of no concern.
Despite the recent economic crisis, the European Union has been a great success. Never in our history have many so countries had such a continuous time of peace. Never in our history has the average wealth of each European country been so high. Never in our history has Europe had such good relations - internally and with our neighbours and partners. The manner in which we act now will determine our stability and prosperity into the future. In the first half of the 20th century, approximately 60 million Europeans killed each other in two world wars that started on our continent. In the 21st century, Europe is at peace, the Berlin Wall has disappeared and ten former Soviet-dominated states have joined the European Union.
Two political scientists, Professor Bruce Russett and Professor John Oneal, have examined statistical data on wars around the world from 1886 to 1992. This research, which was done for their book, Triangulating Peace: Democracy, Interdependence, and International Organizations, concludes that three variables help to explain how likely it is that a country will or will not go to war: economic interconnectedness, democratic traditions and membership of international organisations. All three factors help to prevent wars. When all three are present and at their most favourable, the probability of war is reduced by 71%. Professor Russett and Professor Oneal have found that economic interconnectedness is the most important of the three factors. The fate of the former Yugoslavia shows what can happen when this interconnectedness breaks down. The European Union which is still a work in progress has shown remarkable resilience in dealing with the economic crisis to date. We have some way to go, but we should acknowledge the progress that is being made. Together we can build what Professor Shiller calls "the good society". This requires intent and tenacity. It also requires institutional capacity. Of course, markets are important, but traders do not have disinterested razor-sharp minds. Psychological games are best ignored.
When Ireland joined what is now the European Union, our per capita income was a little over half of the average per capita income of the nine member states at the time. Based on 2011 figures, our per capita income - €35,455 - is three times that of Estonia, which is a fellow EU and euro member state. When we joined the Union, there was a waiting list of up to five years for a telephone. Our biggest export was our people. At one point, our population dropped below 3 million. We now have a diversified economy in the information technology, financial services, agriculture and food, pharmaceuticals and manufacturing sectors. We have one EU Commissioner, just like Germany and Britain. The Secretary General of the Commission is Irish, as was her predecessor. We are disproportionately represented in the European Parliament. We have one Minister at the Council of Ministers, like all other member states.
This month, we commenced our seventh Presidency of the European Union. I believe we became sovereign the day we joined the Union. I sometimes think that if those people who were in the GPO in 1916 could have looked forward to Ireland running the European Union in the way we have in our sixth and now our seventh Presidencies, they would have been very proud. We should be very proud too. Joining the Union gave us a real say in the world and the possibility to shape an agreed, peaceful and prosperous future. Up to then, our interest rates and the value of our currency was decided by Britain. In the euro area, they are set by a Central Bank into which we have input. The European Union is not perfect - it is, as I said, a work in progress - but it has served Ireland and Europe well. It won the Nobel Peace Prize in 2012 and we might well reflect on why that was. As we mark 40 years of Irish membership, we should reflect on the remarkable achievements that have blessed Europe and Ireland.
Yes, there is a need for solidarity in Europe, but it is also much needed at home. We do not just need solidarity among member states; we need solidarity among people. There is more than enough to go around in Ireland. It is time to stop cursing the darkness; each of us can light a candle. There is a job to be done in repairing the economy. However, let us not mistake economy for society. We can build what Schiller calls the good society. We have the tools; we can do this job in solidarity.
Cuirim fíorchaoin fáilte roimh Gay Mitchell anseo inniu. Níl aon amhras faoi ná go raibh sé thar a bheith éifeachtach agus misniúil i gcónaí mar ionadaí na hÉireann san Eoraip. Thug mé faoi deara gur sheas sé an fód go minic ar ár son. Is mór an phribhléid dúinn í go bhfuil sé in éineacht linn anseo inniu.
I would sincerely like to welcome Mr. Gay Mitchell who has been an exceptionally effective and courageous representative of Ireland in Europe. He has been consistent in his views during the years and he took a stand whenever it was necessary. He has shown great personal courage, as did his brother before him. For that reason, we owe him a debt of gratitude. We thank him very much for being with us today to share his views on the European project and, at the same time, give us an opportunity to make our own comments in the hope that he might be able to keep our views in mind when he returns to Europe.
It is interesting that Mr. Mitchell made reference to 1916. If one looks at the Proclamation of 1916, one can see that we make reference to our allies in Europe and throughout the world, which in many ways was visionary because, at that time, the patriots of Ireland realised that it was only through working together in a common cause that we could be respectful of everyone's right to independence and freedom.
One of the greatest and most important elements of the European project is the fact it worked towards creating and sustaining an environment in which war will never again be seen as a solution to any problem. The fact that millions have lost their lives in war is one of the greatest obscenities I can think of. When it is all done and finished and the millions are buried while further millions suffer from their injuries, we have all of the hate that goes with it and the decades required to get some normality back to human conditions. When the European Union was first set up, its founders were conscious of what war had done to Europe. It is interesting that those who were hostile towards each other, who had a terrible history of hostility and animosity, were prepared to work together for the common good because they realised there was no other solution. They realised that all we would have was a continuity of armed conflicts, such as we see happening in other parts of the world.
While the United Nations has its own specific role to fulfil, there are times when we in Europe could also state clearly that we are totally opposed to the sale of arms to any other country. It may not be our role but we are capable of having an influence on the actions of other people. It is very sad, when I see the changing of the guard in one country or another - whether it is in Iraq, Libya or Syria - to realise that although we may have sold arms to that country, we are then going in to remove that same regime from power. There is something very sad about that because it tells us the bottom line is the bottom line of the balance sheet. That has to be removed from any consideration we have into the future.
It is evident currently, given the austerity measures we all have to suffer, that people will make arguments against the European project. In Ireland, there will be those who are supportive as well as the detractors, but we must be careful not to have a knee-jerk reaction at any specific time. We must look at the totality of what we have at our disposal and the good the European Union has done, first, in keeping war out of the equation, and second, in ensuring there is free trade and free movement of people. There are so many pluses to be considered.
I was very sad and disappointed, particularly as we were embracing and celebrating Ireland's seventh Presidency of the European Union, that the UK Prime Minister, Mr. Cameron, chose that very time to reactivate the issue of whether Britain should stay in or remove itself from the Union. If we are to look at that in clear-----
The Senator has just 30 seconds to conclude.
It is a sad situation. This leads me to the question I have for Mr. Mitchell. Was he disappointed that the suggestion was even made that a referendum should take place on such an issue? We must bear in mind that a referendum very often only reflects the mood of a given time. If we look at the bigger picture, we know we will be dependent in some ways on our interaction and influence. Can we hope during the Presidency to interact with Prime Minister Cameron, not just with him? My honest belief is that he will at that stage have lost control of the momentum he has started. However, we must use this six months to get a message across to the greater population of Britain that there are bigger issues involved than the conditions they may enjoy. There is the issue of saving lives, the issue of being fair, the issue of equality and all of those other issues. I cannot imagine a European Union without Britain. It is as simple as that. I hope Mr. Mitchell will be able to respond to us today on how we can play a role in ensuring that will not happen.
I join the words of welcome to Mr. Gay Mitchell who has made an outstanding contribution to politics at local level as Lord Mayor of Dublin, as a Deputy, as a Minister of State and as an MEP. We are honoured to have him in our presence today and I thank him for a most thought-provoking speech.
As we mark 40 years of EU membership, it is worth looking at the benefits the European Union has brought to all of us here in Ireland. It is necessary to look beyond the benefits we all see in our localities. The European Union is a global player and Ireland, as part of it, plays a crucial role in all aspects of EU policies, whether they are aimed at the local economy and environment or the global stage.
Ireland has received in excess of €68 billion in financial supports in the past 40 years. This funding ranged from a meagre £47 million in 1973 to when it peaked at €3.2 billion in 1997 to financial supports worth just over €2 billion in 2011. The majority of this has gone to support our farmers through the Common Agricultural Policy, CAP. It is significant that our MEPs are fighting to ensure the interests of Irish farming are protected when the current reform of the CAP is considered and voted upon by the European Parliament.
We have seen that Ireland is now the home of eight of the ten largest global technology companies in the world and 15 of the top medical device firms. We ask ourselves why we have benefited more from US investment than China, Brazil, India or Russia combined. The reason is because we are part of the European Internal Market that guarantees multinational firms access to the European marketplace. Yesterday, Bill Gates visited Ireland and Microsoft is a perfect example of the benefits that flow to Ireland as part of our EU membership. Ireland's membership of the European Union has been good for business and jobs. It is not just the multinationals which have benefited. Irish firms have built on the opportunities presented by the European Union and the role of the Internal Market and have forged significant markets for Irish goods and services in the Union. No better example can be seen than our indigenous food and drink companies. It is striking to consider that Ireland is the largest producer of beef in the European Union and the fourth largest producer in the world. I will cut my speech short because of time constraints.
Another example is the infrastructural improvements supported by the European Union. We have completed motorways throughout Ireland from Dublin to Waterford, Cork, Limerick, Galway and Belfast with the assistance of the Union. We had no motorways in this country in 1973. Obviously, investment in infrastructure such as water treatment, landfill site management systems and recycling schemes, all of which are supported by the European Union, are helping to improve our infrastructure. Climate change is one of the environmental problems of great concern to us here and is not something that can be tackled by individual countries. The European Union leads the world in seeking to combat this significant problem.
The EU Social Fund has benefited Ireland and created training and educational possibilities for many young people that would not have arisen had we not been members of the European Union. A special mention must be made of the Erasmus programme that has enabled thousands of Irish students to study abroad as part of their university studies. In the past ten years, 20,000 students in Irish universities have studied abroad and twice that number have chosen Ireland as the location for their year of Erasmus studies. That means that 40,000 students have come to Ireland over that period.
The European Union's role in helping the developing world is of particular importance. As the largest provider of development aid in the world, the European Union is crucial in helping developing countries emerge from poverty. Mr. Mitchell referred to this. These are just a few examples of how Ireland has benefited from EU membership in the past 40 years.
I have a few questions for Mr. Mitchell. Where does he see Europe's place in the world 20 years from now and how does he see the EU project developing? Will he give us an update on the status of countries seeking EU membership? Something that is very much in the news is rising Euroscepticism in Great Britain. How is the European Union dealing with this issue? I again welcome Mr. Mitchell to the House and look forward to further discussion.
I extend a warm welcome to Gay Mitchell and thank him for coming to the House and for his wonderful speech in celebration of the 40th anniversary of our membership of the European Union. Like the previous speaker, I will mention some wonderful commercial developments that have benefited the country. A total of 60% of our exports go to Europe, with 79% of our food exports going there. A very controversial development, on which I would welcome Mr. Mitchell's comments later, is the fact that one in five Irish beefburgers is sold in European branches of McDonald's every day. One in every pack of Kerrygold is sold here in Ireland while seven are sold in Europe. A total of 80% of our visitors come from Europe, which I cannot believe, and €40 billion of our turnover comes from European-owned companies in Ireland.
These are wonderful positives arising out of EU membership, but I will move on to things that might not be so positive. I am due to travel to Germany this Friday to attend a big global fair in Cologne which exhibits all the chocolates, biscuits, crisps and sweets of the world. Everyone probably wants to come with me because it sounds like good fun. It is so wonderful to be an Irish company over there with the 100 other Belgians who are making chocolates, the Germans and the French, although we must remember we are from an island; therefore, sometimes there is a slight disadvantage to this. It is a wonderful opportunity for a small Irish company to be able to travel to elsewhere in Europe. In respect of euros and dollars,12 to 15 years ago when we had the punt, it was very hard to get one's head up and be taken seriously as a woman making chocolates.
In saying this, some laws made in Europe simply do not suit this small country. There are so many EU laws. Will Mr. Mitchell comment on this and tell us how we could be better watchdogs in making sure something does not slip through that does not suit us? I would like him to look at and possibly champion the labelling of alcohol. The former Minister for Health, Deputy Micheál Martin, did this with regard to cigarette smoking and this development spread throughout the rest of Europe. The European Union could be the leader in the world. I remind the House that the Union allows 60 additives to be added to wine. One would say this is fine, although one would like a label on one's wine bottle. I am sure one would like to know that protease, which is derived from porcine or bovine stomachs, is in wine. Other additives in wine could include gelatine, which the House will be glad to learn is food grade; a different type of protease called pepsin, which is derived from the bovine pancreas; or possibly isinglass, which is one of my favourites and derived from dried swim bladders of fish. Mr. Mitchell will be talking to a very strong lobby of vintners but, we need alcohol to be labelled. He has seen what has happened-----
The Senator has one minute left.
I beg Mr. Mitchell to keep an eye on genetically modified foods. We made a wonderful start in 2003 by saying no to genetically modified foods and should be the world's watchdog in respect of genetically modified ingredients. Slowly but surely, however, it is beginning to slip. We are allowing a little bit of corn and some animal feed in and there is much more pending. If one looks at the satellite image of Ireland, one can see we are on the edge of Europe. This is a beautiful green country. It is not a case of my just saying it; that is what we look like. Let us stand out, protect our niche and not fall in step with Europe if it allows genetically modified foods to take over without scientific research and before we know that it is safe for the planet, as did the United States. We are talking about more than human health; we are talking about climate change.
Will Mr. Mitchell comment on fishing? We are surrounded by wonderful seas and know we have probably given away too much. What is the future of our rural communities which are still devastated by the effects of being a member of the European Union?
I welcome Mr. Gay Mitchell to the House. It is always a welcome departure to have guests address the House, especially those of his experience in local, national and European politics. It is great that he has shared Europe's history and experiences with us and I enjoyed listening to him.
This is a timely visit given that Ireland is holding the Presidency of the European Union and many Ministers and officials will visit the country during the next six months. This is the seventh time we have held this responsibility and it is an honour for the country. The 2013 Presidency comes as we celebrate the 40th anniversary of our accession to the European Economic Community in 1973 and it is rooted in our continuing commitment to the European project since we joined.
As we mark the 40th year of our membership, we should reflect on the remarkable changes that have taken place in the country in terms of infrastructure, as well as culturally, politically and economically. Let us look back to 1973. Senator Mullins has outlined several changes since. At that time Ireland's wealth level stood at 60% of the European average, while today, despite the effects of the economic crisis, Ireland's level of prosperity is above the EU average. In the early 1970s, more than 50% of our exports went to our nearest neighbour, the United Kingdom, but today we trade advanced goods and services globally. In particular, EU economies such as Germany have become increasingly important for Irish exporters. These have been some notable and welcome points in our development and change since we became a member of the Union.
I wish to focus on our priorities and aims for our EU Presidency which will help to shape and contribute to Europe's growth and recovery priorities and serve to highlight the importance of Ireland's debt situation and any proposed debt deal coming to manifestation. Ireland's priorities can be found in the words stability, jobs and growth. As a country we have gone through financially turbulent times exacerbated by a world recession. However, in great adversity opportunity knocks and now is the time that the European Union can display its strength and stability and show that we have the ability to foster growth, even in these much-maligned times. We must show that once we secure steady growth we can then foster employment opportunities and contribute to the welfare of each of our citizens.
The best example of Europe's ability to confront such trying and testing issues is that of this country. Undoubtedly in the recent past Ireland has gone through peaks and troughs in terms of growth. In the 15 years preceding 2008 we were the envy of Europe with our unprecedented economic growth fuelled by too many resources being devoted to the property sector. Irish banks had adopted a flaithiúlach approach to lending which culminated in the Government of the day guaranteeing their borrowings, thereby inextricably linking bank debt to our sovereign debt. The cost - economic, human and otherwise - of rescuing our banks and their creditors was vast. In 2010 we were obliged to seek support from the European Union and the IMF when the door was closed on the international financial markets. There is no doubt whatsoever that the European Union was there for us at a time of great adversity for the country, but by taking the steps we took as a country we also ensured the stability of Europe's banking sector and that should not be forgotten.
As a consequence of the decision made by Ireland, its people have suffered to the tune of €64 billion. We have taken a hit and played our part in the economic malaise. Taxes have increased and expenditure has been curtailed in the country. The size of the public sector has been reduced with salaries cut by an average of 15%. The measures we have had to take have been difficult and there have been no easy choices. Now, we need to be shown the daylight at the end of the tunnel which should manifest itself as relieving the burden of our bank-related debt. We have shown that there is a path back from the crisis. It is not an easy path and undoubtedly it has been and will be a long path. It is in Europe's interest that we can be the poster boys of Europe and show that other countries can come through an austerity programme successfully, gain the confidence of international lenders and take back fiscal independence while remaining within the Union. As a citizen I yearn for the day that the term PIIGS, referring to Portugal, Italy, Ireland, Greece and Spain, becomes PIGS and I acknowledge that Mr. Mitchell, our Government and all other representatives in Europe are striving to achieve this goal.
My next point relates to Europe's aid agenda and our simple mantra that we must help others to help themselves. Europe has been to the forefront of this issue for many decades. The EU member states have always made a healthy contribution towards countries in development programmes. More than half the money spent on helping poor countries comes from EU member countries, making it the world's largest aid donor. Three of the world's five largest donor countries are EU members and four of them already donate 0.7% of their gross national income to development aid. By way of corroboration, in 2010 EU development aid totalled €53.8 billion, a significant sum given what was taking place on the continent at the time. I had hoped to develop this point further but it appears I am out of time.
I am sorry, Senator. Other Members are waiting to get in.
I accept that. I thank Mr. Mitchell for coming to the House and addressing us today. I thank the Acting Chairman for being given the opportunity to put my point across.
I welcome Mr. Mitchell. Members have referred to his late brother who made a practical contribution to greater contacts between Europeans. I remember when it used to cost £650 to fly from Dublin to Brussels. He played a major part in opening up that market with his friend in the Commission, Peter Sutherland, against Civil Service advice. That was a real tester of bringing Europeans together. I endorse everything Mr. Mitchell has said about the harmony and friendship that has been generated by the European Union and the benefits of free trade. They have all been great success stories.
Where I might diverge with Mr. Mitchell, however, is on the issue of the euro. It seems to have been a remarkably badly designed currency that has resulted in mass unemployment in countries such as Greece, Spain and so on. Our problem was that we sleep-walked into it. There should be a duty to examine policies which might seem like a good idea at the centre but which do not work at the periphery.
While I appreciate all the good things to which Mr. Mitchell has referred, there is a crisis, part of which was illustrated by Mr. Cameron's speech yesterday. By the way, I hope people will read the speech. It is far easier in today's media to get comments about the speech rather than read what he actually said, which is far more important. Perhaps we could debate what he actually said rather than what commentators thought about it.
We have problems due to the lack of bank regulation and should have seen them 15 years ago. There is a problem with the lack of an exit mechanism. I cannot see Greece recovering under the present arrangements and that issue will have to be addressed. The loss of exchange rates and interest rates as instruments of economic policy is a problem. Our labour mobility does not go to Germany but rather Australia, Canada and so on. It was our own fault for sleepwalking into this. We should have played a greater part in designing a better common currency to what emerged. We must address the unemployment problem.
What do people look for in Europe? More humility, less bureaucracy, less jargon, more accountability, less sleepwalking into badly thought out policies and more respect for parliament. Following what Mr. Cameron said yesterday there was a headline to the effect that he cannot have à la carte meals. Is the alternative to à la carte meals to be force fed? There is a legitimate issue for us to discuss in this regard. All layers of government, including this House, which may face a referendum, should justify themselves.
There is a lack of confidence in Europe. Pro-market employment rules have been referred to and we need more of them. France, in particular, is always more interested in employment legislation for those who already have jobs, but it is indifferent to the mass unemployment which Mr. Mitchell and the other Members of the European Parliament have addressed.
The principle of subsidiarity is another issue. There may be items that should be returned to member state governments. I used to hear Mr. Delors talking about this, but I do not think he ever gave any powers back to the nation states. Are there functions of government that are better carried out by nation states? Why is the traffic in this area all one-way?
Mr. Mitchell has written about the problem of bureaucracy. People find the Brussels bureaucracy annoying and intimidating. I welcome Mr. Mitchell's analysis of Professor Schiller's book. There was a reference to Wall Street versus main street. Main street is suffering, while we have been cowed by the financial markets that Mr. Mitchell described in his fine account.
We must address several questions for the future. We must investigate how much unemployment is due to the fixed exchange rates regime. The Minister for Finance, Deputy Noonan, referred to feta cheese recently. Some in the media thought it was a joke, but how can Greece recover at a fixed exchange rate vis-à-vis Germany? The democratic deficit must be addressed also. That is a serious problem which citizens hold strong views on, as is the principle of subsidiarity.
I hope Mr. Mitchell will refer to the unemployment problem, the democratic deficit in Europe and the powers that should properly reside with the nation states.
Ba mhaith liom aontú leat, a Chathaoirligh, agus fáilte a chur roimh an Uasal Mitchell. Céim dearfach é seo. I propose to the Seanad that a similar invitation be extended to the three Irish MEPs from the northern end of the country to engage with us during the course of the Irish Presidency of the European Union.
Earlier in January the President of the European Commission, Mr. José Manuel Barroso, visited Dublin. During his visit he made a remarkable statement. In response to questions about the role of the European Union in the financial crisis he argued that the "crisis was not created by the European Union." He went on to blame "unsustainable public debt created by national governments and by irresponsible financial behaviour tolerated by national supervisors." This is truly a remarkable statement. Clearly, he is right that member state governments, regulators and banking chiefs played a central part in the financial crisis that hit in 2008. However, to suggest EU institutions or EU policies played no part in the crisis is simply untrue. The role of the European Central Bank and its monetary policy were central to the economic collapse. Low interest rates provided a powerful incentive for both banks and governments to run up unsustainable debts. These rates were set by the ECB, not in the interests of the sustainability or stability of the eurozone but in order to serve the interests of the then stagnant eurozone economy. There is scant evidence of the ECB or the European Banking Authority expressing alarm when the inevitable lending and borrowing spree started to spin out of control. Likewise, deregulation of financial services, a policy actively pursued by the European Commission, undermined the power of regulatory authorities to police banks effectively. The sins of member state governments were also the sins of the Commission and the European Central Bank. They were also the sins of some parties then in opposition, including Fine Gael which engaged in what can only be described as auction politics in the run-up to the 2007 general election, adding even more fuel to the speculative fire caused by policy decisions in Dublin, Frankfurt and Brussels.
Since the onset of the crisis, what has been the role of the European Commission and the European Central Bank? Has their approach been defined by the solidarity alluded to by Mr. Mitchell? Unfortunately, it has not. The same hawkish approach has prevailed, with devastating social and economic consequences for ordinary people, particularly in programme countries such as Southern Ireland. The ECB remains the single biggest obstacle to a meaningful deal on the banking debt. This means it is the single biggest obstacle to our exit from the troika programme and a return to the sovereign bond markets. At the same time, the Commission has been the engine of the anti-growth and anti-citizen policies of austerity that are hurting hundreds of thousands of families and blocking our social and economic recovery.
Just as the European Union played a central role in creating the financial crisis that engulfed us all in 2008, it is playing a key role in the perpetuation of policies that have failed and will continue to fail to tackle the causes of the crisis.
Mr. Gay Mitchell
I thank Members for their contributions which I found very interesting. I also thank them for their very warm welcome. Senator Labhrás Ó Murchú was particularly kind to me, which I very much appreciate. I agree with what he said about the 1916 Proclamation and that we should remind ourselves about it more. I know he has had a lifelong interest in the Irish language. I, too, have a great love of it. All of my children were educated through Irish and my schoolgoing grandchild is also attending a gaelscoil. That opportunity would not have been available had we not joined the European Union. That resulted in many people deciding that they wanted to save the language. It is not just a matter for Gaeltacht areas. There is a huge demand for all-Irish primary and secondary school places, which demand was created when people saw the country being part of the European Union. The European Union is not about assimilation but about integration, whereby Catholics, Protestants, Germans, non-believers, people of different sexual orientation and backgrounds can learn to live together in peace and stability.
I was asked whether I was disappointed with the UK reference to holding a referendum on European Union membership. It is very difficult to interfere with the rights of another member state and I agree with Senator Sean D. Barrett that we should listen to what Mr. Cameron has said. I do not think he has said anything that was not anticipated, but there are very deep issues involved that may not have been fully thought out. There is a tendency in some quarters in politics to look at what the focus groups are saying and then repeat it, but politics is meant to be about more than this. What will happen, for example, if the British do get themselves to a position where a referendum will be held? As we all know, the result in a referendum can go either way. I believe it was Charles de Gaulle who said the terrible thing about referendums was that people never answered the question asked. One asks a question on a specific issue and they say they do not like the Government and so forth. That is the difficulty. A referendum is not a perfect instrument.
I do not know what effect such a referendum would have on the future of Scotland or Northern Ireland, for example. In the context of a future Border poll in Northern Ireland, if the United Kingdom was outside the European Union, would voters in Northern Ireland decide they would rather be in the Republic of Ireland and inside the European Union rather than outside? A British citizen living in Ireland e-mailed me yesterday to say he was British but wanted to keep his EU citizenship and passport. He asked me to raise with the Irish Government the possibility of fast-tracking Irish citizenship applications from British citizens living here. That demonstrates the fear being created unnecessarily in this regard.
I have listened to what Mr. Cameron said last night and understand why he said it. He is under a lot of pressure, not just from the UK Independence Party, UKIP, but also from his own backbenchers. However, I also heard interviews with passengers travelling on the Eurostar, business people and others, who were shocked at the idea that there would be a referendum on Britain's membership of the European Union. I know from discussions I have had with British civil servants that they are fearful of where this will take them. Having said all that, Britain is a democracy and its people must decide for themselves. I mention in passing that the Lisbon treaty specifically allows for a member state to leave, if it so wishes, but I hope Britain will not leave. It is not only that we export a lot to it. If memory serves me, we import more from it than from Latin America and Japan added together. It is a two-way relationship. There are social ties and special relations between our two countries, about which the Taoiseach and Mr. Cameron spoke recently.
Senators asked if the Irish Presidency could promote greater understanding on this question and I believe it could. Ireland is one of the countries in Europe that understands Britain best because of our exposure to the British media and our close ties with our neighbour. When one sees the British MEPs in action, particularly those from the mainstream parties, it becomes clear that they are some of the best contributors in the European Parliament. Britain has a great tradition of public service and excellent public administration. I would prefer if they took a leading role in the European Union, alongside the bigger member states, instead of being so recalcitrant.
I thank Senator Michael Mullins for his comments. It seems strange now and when I mention it to my children, they think I am talking about ancient history, but I remember the five-year waiting lists for a telephone here. I also remember that if one had a sick child, for example, one had to get a ministerial directive in order to have a telephone installed in one's house. That is the way it was, not in ancient times but the 1980s. I had the signatures of 1,000 people in the parish of Crumlin alone who were waiting for a telephone. The best road in the country was the one running from Newlands Cross to Naas. The country has changed dramatically since. People are now much more mobile than in the past, something on which we need to reflect. Also, as the Senator said, because of our commitment to the European Union, the level of foreign direct investment here increased by 30% in 2011, the last full year for which we have statistics. That was the second highest increase in foreign direct investment in the European Union after the Netherlands.
The Senator asked where we would be in 20 years time, a very interesting question. Within a generation, the population of the world will have increased by 2 billion, 90% of whom will have been born in what is now the developing world. As things stand, the European Union has 9% of the world's population but accounts for somewhere between one quarter and one fifth of the world's GDP. If memory serves, it is nearer to one quarter than one fifth. Within the timescale mentioned by the Senator, Europe will only have 6% of the world's population. Population growth is occurring in the east and south. People in these countries have mobile phones and computers and their children know how to use them better than I do. I hope I will not bring criticism down on my head for saying this, but it is very doubtful, for example, that Britain and France will continue to be entitled to a seat on the UN Security Council in such circumstances.
It is not just a question of what we want within the European Union but also of what role the Union will play in the world and how we will look out for its interests.
I recently read some interesting research that was circulated by the European People's Party. We all know about the future of Brazil, India, China and Russia - China will continue to be powerful - but we might not have noticed some countries that are coming up, such as Nigeria and Colombia. While they might not be on our radar now, research shows they might be very powerful in the world of the future if they get their acts together. Europe cannot afford to speak with 27 or 30 different voices. I will come back to the issue of democracy, which is relevant in this context, when I respond to Senator Barrett's comments.
I thank Senator Mary Ann O'Brien for her welcome. It is true that many laws are coming through the European Union. Many of them are replacing existing laws. Many of them are being introduced because national governments or parliaments have asked for them. Some laws start off in national parliaments, perhaps as questions to Ministers, before making their way through. There is a process of scrutiny in all of this. I have served as Chairman of the Joint Committee on European Affairs and the former Oireachtas Sub-Committee on European Scrutiny. I understand that the Seanad intends to take a better role in the area of scrutiny. That is really important. It is very dry work. If we did not have our Judiciary, we would be living in a jungle and the law would amount to no more than the survival of the fittest. The only judges one reads about in the newspapers every day are those who deal with murders, serious crimes and things of that kind. All of the other judges are doing vitally important work as well. The same has to be said of Deputies, Senators and MEPs. Their work might not be covered by the media, but that is not the measure of their success. The role of a parliament is to scrutinise these things. The Upper House of the Oireachtas could play a particular role in this regard. I welcome the Seanad's plans to expand its role in this area. I think it would be pushing an open door as far as co-operation from Europe is concerned.
I was also asked about fisheries. As I mentioned, the economy is very diversified now. One of the things we sacrificed was our fisheries. Approximately a year ago, I attended an interesting seminar on where our future wealth will come from. It will not come from fisheries as much as it will come from beneath the sea. The maritime sector is a crucial part of our long-term future. All sorts of wealth can be found beneath the sea. We have not given away our rights in that regard. We need to safeguard them. My colleague, Pat the Cope Gallagher, is involved in negotiating the fisheries agreement.
I was also asked about the labelling of alcohol. I am glad that Deputy Martin was mentioned. Two reports recommended a smoking ban. One of them was written by the Minister, Deputy Shatter, and I wrote the other one. We never got any credit for it until someone found themselves in a tight corner and tried to blame the Minister, Deputy Shatter, and me. I agree fully with the ban. My family has been devastated by cancer. I also agree with what was said about the labelling of alcohol. These issues are being examined. The European Parliament is being vigilant about genetically modified food.
I would like to mention in passing how the legislative process works in the European Parliament. We do not have the right to introduce Bills in the way that Senators and Deputies do. The Council of Ministers does not have that right either. The sole right to introduce legislation lies with the European Commission. The European Parliament and the Council of Ministers can ask the Commission to introduce legislation, just as the Oireachtas does. When legislation is introduced, it is decided on jointly by the Parliament and by the Council. Just as the Council meets in various formats, such as the Agriculture and Fisheries Council and the Economic and Financial Affairs Council, the Parliament has more than 20 committees. The Commission's reports go to those committees. A member of each committee is appointed as rapporteur, using the d'Hondt system. The biggest group gets the most reports, and the second biggest group gets the second most reports, etc. If one is the rapporteur, one is put in charge of that file. A shadow rapporteur is also appointed. What happens in the European Parliament is different from the adversarial British system that we inherited.
Proinsias De Rossa put it very well when he said that in the Dáil, people in opposition get up every day wondering how they can wrong-foot the Government and people in government get up every day wondering how they can prevent themselves from being wrong-footed by the Opposition. We do not have the same system in Europe. Nobody has a majority in the European Parliament. There is no government in the European Parliament. We have to reach agreement. When one gets out of bed in the morning, one has to think about how to reach agreement with the other parties. That is how we make legislation. It is very imperfect. The 500 million people who live between Malta and Finland and between Ireland and Poland are very diverse. The miracle of the system is that it actually works.
The bank sovereign debt issue was one of the matters mentioned by Senator Higgins. The European Council, in particular, is exercised about this issue. Proposals will come forward as part of a new supervision mechanism for banks. I do not think the European Union will end up supervising every bank. Some sort of matrix will probably be used whereby the European Central Bank will have a role if certain criteria apply and it will be a matter for the national legislator if those criteria do not apply. When that comes, it is proposed that the ESM will be open to dealing with the recapitalisation of banks. That is not finalised yet. I cannot force anybody to share my personal view on this matter, which is that I do not see how that cannot be made available to us if it is made available to some banks. If we are comparing debt-to-GDP ratios across Europe on the same basis, we cannot have something on the balance sheet of Ireland's national accounts that is not on the balance sheet of other national accounts. One has to compare like with like. My understanding is that if we get this approval, which I am optimistic we will get, the Government might never draw it down. If we have it, the markets will probably say "they can get this money, so we will invest in those banks ourselves because we can still get a good rate". That will be the important part of it.
The Senator also asked whether there was light at the end of the tunnel. Not only do I think there is light at the end of the tunnel, but I also think our future is extremely bright. The last question I asked the president of the European Central Bank, Mr. Draghi, at the last meeting of the Economic and Monetary Affairs Committee before Christmas was whether he shared the view of the German finance Minister, Dr. Schäuble, and a British banker who was speaking on behalf of what is called the Lisbon Council, which was that as recovery comes, the West will do well and Europe will be the strongest part of the West. Mr. Draghi, who as a central banker is not particularly known for making exuberant statements, said he absolutely agreed with that view. We are putting in the foundations for a sustainable recovery in the future. I heard Mr. Bill Gates say yesterday that Ireland and Europe are getting their act together.
I was also asked about development aid. This is not all selfless stuff. It is not all about the fact that 28,000 children are dying every day, but it is to do with that fact. At the end of the Second World War, this country had an infant mortality rate of approximately 48 per 1,000. That might have been pretty typical of poorer countries across Europe at the time. I led the European Parliament team that attended last year's UN review of the millennium development goals. I was part of a group of people from many countries. As we sat down, the Assistant Secretary General of the World Health Organization mentioned in a matter-of-fact manner that there is a range of mortality rates for children, the lowest being in Ireland and the highest being in some other country. I cannot remember what country it was. As I said earlier, the current rate is 26,000 children per day. Although it is a horrible and horrific figure, at least it represents a reduction on the previous level of 38,000 per day. An additional 13,000 children are living every day because we are working with people in their countries to assist them, as opposed to telling them what to do. The current rate is 68 per 1,000, which is not that far beyond the rate in this country at the end of the Second World War. One can see how we can achieve these goals. It is not all selfless and humanitarian. The future is going to be in some of these countries. We have to look to that. When I sat beside the Rwandan economic affairs Minister at a meeting in Brussels, she asked me throughout the meal how the financial services sector operates in Ireland because that country has ambitions in the same sector. The future is there. These countries can be our trading partners. We will not have massive migration if we deal with it humanely, properly and wisely.
I thank Senators Barrett and Ó Murchú for their kind words about my late brother. I noted the things that Senator Barrett agreed with me about. I agree with him that the euro was badly designed.
That is accepted in the European Union. However, in 1989, when the Berlin Wall suddenly came down, we were left in a situation in which Germany wanted reunification whereas France, in particular, and Britain - perhaps more sceptically - were very fearful of a united Germany in Europe. Would Europe become a Germanic Europe or could we make Germany a European Germany? That is why, for political reasons, they decided to go ahead with the euro, even though we had not put in the proper foundations. We are now putting in those foundations and those foundations are going in very well.
In regard to increased accountability, the Senator has put his finger right on the button. This is something that is exercising not only Senators but also MEPs and, in particular, the President of the European Council, Mr. Van Rompuy. He has published a document which states that because we are doing all of this, we must have greater parliamentary accountability, not just to the European Parliament but to national parliaments. He states that what is done at a national level must be accounted for to national parliaments and what is done at European level must be accounted for to the European Parliament. He goes further, however, and points out there are provisions in the Lisbon treaty for the European Parliament and national parliaments together to oversee some issues.
In passing, I will come back to the issue of development aid. The European Commission produced a report stating that if there were greater coherence between what is spent nationally and what is spent Europe-wide on development aid, the saving would be an extra €6 billion per year. In the lifetime of a parliament, that is €30 billion. The House will know what we could do with that money. Why are not we not doing that? We are not doing it because national governments are holding onto it. If we could get national parliaments and the European Parliament working together, we could put the pressure on national governments to do more. There is a case for this. We are exercised about how we can do this more easily.
It is true that if we do not have the exchange rate capacity to devalue, we have structural problems. I do not know where one would draw the line on that issue. Northern Ireland is a poorer place than London, yet it uses the same currency. We have done the unthinkable - we have made ourselves more competitive. When we look at Greece, it has some problems which it brought upon itself and it has problems of confidence because some of the figures it generated did not stand up to scrutiny. However, real progress is being made in Greece and the Greeks are taking very difficult decisions. It will probably be easier after the German election in September for a more sympathetic view to be taken of the southern economies.
We must bear in mind that the European Union does not have its own source of taxation. All of this comes from national taxpayers. Although Ireland has been in the European Union since 1973, we are not yet a net contributor to the budget; therefore, we cannot always rely on others to put their hands in their pockets. There is a determination that Greece will not be allowed to exit and whatever it takes will be done. However, some of that may happen later in the year rather than in the earlier part of the year.
I welcome Mr. Mitchell and echo all that has been said in lauding and complimenting him on his outstanding contribution not only to national affairs but also to European affairs. I wish him well in the future.
Inevitably, given that Mr. Mitchell has covered such a wide variety of subjects, there will be some overlap in the questions. Nonetheless, I am concerned by some elements of the Lisbon treaty that relate to the power of national parliaments. Ireland is a former member of the Western European Union, which has now been superseded by a new committee in Europe. However, even though the Warsaw declaration in March this year signed off on the decision that where there was a bicameral parliamentary system, there would be representatives from both Houses, unfortunately, the situation is that the three representatives from Ireland are all chairs of committees, are all members of the Government and are all Deputies. This flies in the face of the attempts that have been made to have a more inclusive participatory democracy vis-à-vis Europe. I am curious to establish whether Mr. Mitchell is disappointed that, in some elements, the Lisbon treaty, which clearly stated there would be more openness, transparency and democratic accountability among the Commission, the Parliament and national parliaments, has failed. It has failed in the context of this House, which should be used more effectively to scrutinise European legislation.
My final question is on a point on which I am curious to know Mr. Mitchell's opinion. Is he concerned about the continuing stability of the German-French alliance, particularly in light of the election of President Hollande? Moreover, while Chancellor Merkel is personally very popular in Germany - as the Acting Chairman will know, given that we discovered this on the recent visit of the agriculture committee - her party, the CDU, and its coalition partners, the liberals, could possibly lose the election. What implications does Mr. Mitchell believe this will have for the wider European area?
I thank Mr. Mitchell for taking the time to attend. I also thank him for his help and assistance when I was a member of the European Parliament. He was always there to give good advice on how to deal with particular issues.
To follow on from the last speaker, my question concerns the role of the Seanad in dealing with EU regulations. I was at a meeting of the Joint Committee on Health and Children this morning, at which a presentation was made in regard to a new regulation on medical devices. The first question I asked was whether we have consulted the industry here, given that some 160 companies are making medical devices in Ireland. I asked that we inquire with them to find out whether they are happy with the regulation. This emphasises the point about our need to watch what is coming down the line. There are 12 Irish MEPs and I know we have good civil servants working at the Brussels level, watching regulation. From a ground level here in Ireland, however, we do not have enough mechanisms in place. This is why I have been pushing hard for the Seanad to take a role by setting aside two days a month to deal specifically with EU regulation. From Mr. Mitchell's experience - and he has a lot of experience of working in the Dáil, the Seanad and the European Parliament - what is his view of the way we monitor EU regulation? Does he consider we have enough mechanisms in place to deal with this at present? How does he see the Seanad using its role to make sure this is copperfastened and improved upon?
I welcome Mr. Gay Mitchell to the House. I ask my question in light of the fact that Mr. Mitchell has twice won the title of MEP of the year for development. I did not necessarily know that he was the leading figure who successfully negotiated the development co-operation instrument in 2006. While that may sound like nothing much, that co-operation instrument has a budget of €16.9 billion between 2007 and 2013 and ensures scrutiny by the Parliament in development work. I also point to his more recent report on establishing a financing instrument for development co-operation and the lessons learned from that.
My question is in light of a Seanad debate in November on sexual violence in conflict and rape as a weapon of war. I spoke about Burma, Sudan's Darfur region and, in particular, the Democratic Republic of Congo, DRC. I am very concerned about the escalating conflict in the DRC and the lack of attention it receives here. Given Mr. Mitchell's role and experience as vice chairman of the ACP-EU Joint Parliamentary Assembly, I would like his advice on the positive role we could play in highlighting what is happening. While we know the DRC has had many wars, the current war has claimed 3 million lives, both as a direct result of the conflict and as a result of disease and malnutrition. As Mr. Mitchell's speech today showed, there is a clear link between conflict and poverty. What role can we play?
Mr. Gay Mitchell
I thank the three Senators for their kind comments. Senator Mooney asked about the powers following the Lisbon treaty. There are real powers following it. A number of parliaments recently made a submission and, while the Seanad was not one of them because it was not elected in time to do that, it could have had a real influence on how matters were decided.
My one and only book is called By Dáil Account and is a history of the Committee of Public Accounts and the Comptroller and Auditor General. At the end of that book, I talk about the Dáil and the Seanad. It is a purely personal view but since it has been asked about, I will give it. I think the more the Seanad divorces itself from the Dáil, the more people will see its real importance. It always sounds very good saying we need a triple lock, UN approval and ratification by the Dáil and the Seanad but the Seanad is not directly elected, as is the Dáil. There is an understanding that if the Dáil passes something, the Seanad should not frustrate it. The Seanad needs to divorce itself from that and could on its own through a select committee do more than just scrutinise legislation. For example, a number of Commissioners are coming here during our Presidency. I asked a few of them whether they would come to a meeting or meet with a group and they said would love to do so. When they come here, it should be an opportunity to get them to speak either to the Seanad or a select committee. It does not have to be in formal session. In the European Parliament, we use breakfasts, lunches and dinners. It would inform Senators and give them a chance to have their say. One would be stunned by the willingness on the part of the European institutions and the European bureaucracy to do this. I welcome the fact that the Seanad is organising to do that. I am a fan of the Seanad, which has the opportunity to do what adversarial politics prevents the Dáil from doing.
Mrs. Merkel is very popular. The two governing parties lost the recent state election but she will be leading the Christian Democratic Union into the general election. Nobody knows what will happen as the election is not until September but there is an expectation that she will be back as Chancellor, be it at the head of a grand coalition or the same government. She has shown herself to be more accommodating than people give her credit for.
Senator Colm Burke mentioned the role of the Seanad and what I said partly covered that. I welcome the fact that the Seanad is calling MEPs to have this exchange. It is very useful for me to get some feel for the issues Senators really want to raise. Everybody is trying to set one's agenda by raising issues but it is really important for us to hear what Senators have to say. If one looks at the House of Lords and the House of Commons, one can see the House of Lords has a very powerful European committee which is quite separate from the House of Commons. The committee issues reports and visits the European Parliament quite regularly. Much of this is in the hands of the Seanad and I wish it well in respect of it.
Senator van Turnhout very kindly mentioned my role on the development committee. I am glad somebody noticed. I give it a lot of my time and am the European People's Party co-ordinator on that issue.
He is the expert.
Mr. Gay Mitchell
I was the rapporteur for the development co-operation instrument which merged 16 regulations into one. It was the mother and father of all negotiations. The reason for that was because there was an effort by the Commission to grab power. It does not normally do this but it thought this was an opportunity presented by the advent of a new High Representative for Foreign Affairs. The European Parliament organised itself, said that it was not agreeing to it and across party lines, was able to stop it. For the first time, we put in targets, namely, that 20% of the budget would be spent on basic health and education. We organised ourselves to call that into account.
The real problem with the Democratic Republic of Congo is that it does not have a government. When we give aid or assistance to the developing world, it comes with some obligations. They do not involve telling people what to do but are obligations of good governance, gender issues and the targets are set. There is a foreign affairs committee and a development committee in the European Parliament, both of which have had exchanges with Baroness Ashton on these issues. She has been very active in respect of it. It is a very worrying situation. Rwanda has a particular interest in it. It will take a lot of time on the part of the European Parliament. Baroness Ashton is a very busy woman and is drawn all over the world in her position as Vice President of the Commission and High Representative for Foreign Affairs. In that role, she chairs the foreign affairs Council but she will come to Ireland from time to time. It would be very useful for this House to identify when she is coming and to ask her to attend and discuss these issues. She is very disposed and receptive to those sorts of suggestions. I hope I have dealt with the issues.
I welcome Mr. Mitchell. In his address, he referred to the notion of sovereignty and how it is his opinion that ascension to the European Union has strengthened and achieved a real level of sovereignty. It is an opinion I share. Each succeeding treaty we passed has strengthened that level of sovereignty. Sovereignty is about much more than the ability to say "No". It is about partnership and making decisions. Decisions are best made in the context of relations and networks of relationships. That is what my question is about. Does Mr. Mitchell think the perceived damage to our national reputation through broken or neglected relationships has been fully repaired in Europe? That is not necessarily a simple question. I spoke yesterday to a very serious commentator on European affairs who told me he was surprised by the negativity at home among certain elements of our commentariat about our position. This is in marked contrast to the view held by large sections of the European commentariat who see Ireland in a rather positive light. Is he right?
I welcome Mr. Mitchell and thank him for his excellent speech. His responses to questions showed his mastery of the brief for which I congratulate him, in particular for the work he is doing in development. Almost every time we have had a referendum on a European treaty, the issue of abortion has come up and has been a very controversial and sometimes complicating issue, sometimes not for very good reason when one considers that the Maastricht Protocol has been there since 1992 and the EU does not have a competence in an area like that, yet there are interconnecting issues, for example, in the area of development and the European Union's engagement with the developing world. I have often wondered whether enough is done by the Irish Government or MEPs to ensure our distinctive values on that issue - we have a Constitution that honours the equal right to life of the unborn and mothers, notwithstanding current controversies at home - are brought to bear on the European Union's international humanitarian and other engagements. I brought forward a motion on gendercide with others in the Seanad which was very well received for the most part across the floor of the House. I know that is an issue in which Mr. Mitchell takes an interest.
Notwithstanding the good work done at EU level, people still wonder about the massive wastage that occurs every time the European Union moves lock, stock and barrel to Strasbourg once a month and whether something can be done to reassure people at home and outside the Union that it is not a gravy train.
I welcome Mr. Mitchell to the Seanad. When we think of celebrating 40 years of membership of the European Union, some people might think that is quite a long time ago but when one is of our vintage, it seems like it was a very short time ago. Ireland has gone through a huge transformation in those 40 years in terms of the economy, the infrastructure to which Mr. Mitchell alluded such as the roads around the country and, in particular, the peace process. When I look back over 40 years, I can see that Mr. Mitchell and I have had a lot in common. We grew up in the same areas of Drimnagh, Crumlin and Inchicore. We did a bit of running together. He ran around the streets of Drimnagh and Crumlin-----
Mr. Gay Mitchell
Knocking on doors.
-----knocking on doors trying to build his political career. The success of his political career has been referred to. I ran around the streets of Drimnagh and Walkinstown for other reasons but I was not successful at that whatsoever.
The Senator is still running.
Our lives have come full circle.
Mr. Mitchell mentioned the solidarity among the member states and their people.
Where there may not be solidarity among the member states is on the issue of our corporate tax rate of 12.5%. Is there a great difference among the rates of all 27 member states? Ours is the lowest. Mr. Mitchell referred also to the disproportionality of our representation in the European Union. Will this force us into harmonising our corporate tax rate?
Mr. Gay Mitchell
I thank Senator Gilroy for his kind words. I agree with him that sovereignty is about taking responsibility and making decisions in those areas for which we have responsibility. In the European Union we can only do what we are committed to do by the treaties, as the people have permitted us. If something is not contained in the treaties, we cannot do it; it is a matter for national parliaments. The Parliament in Ireland can do whatever it wishes provided it does not contravene Bunreacht na hÉireann, but we are in a different position. Sovereignty is a real issue. With all my heart I believe we became truly sovereign the day we joined the European Union and found ourselves a role in the world. We tend to eulogise the United Nations, rightly, especially because we have supplied many UN peacekeepers and have given a great deal to the United Nations, and many of our people have died. However, we have never had an Irish Secretary General of the United Nations, or anything like it, whereas we have a real say in Europe.
I refer to the perceived damage. I was Minister with responsibility for European affairs from 1994 to 1997, during Ireland's then Presidency. In a general sense we could more or less get whatever we wanted done because people had a great disposition towards Ireland. After the first Nice treaty there was a kind of disbelief that Ireland had voted "No" - not among the older member states, which know that things can go wrong in a referendum, but among newer member states. These countries did not have a great tradition of democracy, which was new to them, and they wanted to emulate Ireland. We were the country they wanted to be. Then they got the idea that Ireland was against the European Union. We had to explain that this was not the case but that people had concerns about the treaty. Things recovered, but then we took another knock after the first Lisbon treaty referendum. People asked what had gone wrong, because Ireland was doing well in Europe, was respected and had a real role there. Things changed dramatically again when the question on the stability pact was put to the people's vote. It was not clear whether a vote was needed. As far as I recall, the Attorney General decided it would be safe to have a vote and people then voted "Yes". That was the single thing that changed the mood in Europe. Most people said "That could not have been easy for the Irish people." That was when respect for Ireland began.
There was a question about the commentariat here and there. In Europe, in private conversation, people ask why other countries do not look to Ireland. In addition, Europe wants a success story; it wants Ireland to succeed. We are very much pushing an open door. I do not know why this does not enter the minds of the commentariat here. I presume that if one goes on the radio and says only nice things one is not invited back. Perhaps the reason is that polemics work, but in my view, something is out of balance. It is right that people should criticise and question; sometimes it gives us strength in the Parliament when we can say we are under pressure at home. There is nothing wrong with that, but it must be balanced by reporting the good things and not being carried away by the negatives.
I thank Senator Mullen for his comments. I refer to gendercide and I am glad there is agreement across the House on the issue. There is a rapporteur on gendercide on the development committee. I became interested in this subject after reading an article in The Economist which began with the premise that across the world there were 100 million women missing because of gender-based abortion and infanticide. However, the real figure is likely to be 200 million. The disproportion between numbers of men and women in certain countries is horrific and shocking, and research has shown this is the case. Recently the BBC produced some articles on this subject, which for whatever reason does not get much coverage here. Everybody would agree that the idea of terminating the life of either an unborn or a born person because of her gender is totally unacceptable.
There are differences in the Parliament on matters of sexual and reproductive health and rights. Some members will not vote for sexual and reproductive health funding, while others will, including me. Some will not vote for any of these things, while others will vote for everything. The phrase "and rights" is taken by many to mean that there could be funding for abortion in the developing world. I have been involved for eight years in the ACP-EU Joint Parliamentary Assembly, where 30 MEPs, if we can get that number, meet with the 78 African-Caribbean-Pacific parliaments. We do this twice a year. One such meeting will happen during Ireland's Presidency, although it will take place in Brussels. During all those years I never heard this issue being raised. People are more concerned with other issues. However, there are serious gender issues which can be addressed, and not only in the traditional ways in which we consider them. For example, in countries where gendercide is an issue, if there was some support in the form of crop insurance and insurance for old age, as there is in this country, people might not feel the necessity to have very big families, and to have boys rather than girls. We need to approach these matters on a range of fronts and this is something in which I am very much involved.
I am glad to hear Senator Eamonn Coghlan is still running around the streets of Dublin. We come from adjoining parishes, as he noted. I am glad he mentioned the peace process, which I forgot to do. We should remind ourselves that much of the solid support for the peace process came from and continues to come from Europe.
The 12.5% corporate tax rate is entirely a matter for member state governments and the European Parliament has no competence in it. Of course, national governments could decide together to change this situation, but it would require unanimity. I sometimes imagine that if the Irish Government said one morning, "We are going to put this 12.5% tax rate on the table; let's talk about the issue," the British, the French and some of the smaller member states would immediately say "Not so fast." Such a change would require unanimity, which is unlikely. People are looking at the CCCTB, the common consolidated corporate tax base, which is something we could consider. Others try to build into that a repatriation of profits, because there would have to be an allocation of profits to where sales had taken place and where staff are mainly based. There are points of that kind. Let us be open about this. There is a certain jealousy in regard to Ireland's tax rate, but ours is not the lowest rate in the Union. I believe Bulgaria has a rate of 10% and one of the Baltic states also has a low tax rate. The French tax rate is supposed to be 35%, or somewhere close, but the effective rate is 8%. I do not wish to point the finger at France, but some countries speak of how egalitarian they are, with a high rate of tax, while in the background they are writing things off in order that the effective rate is 8%. Our tax rate is very transparent. Our effective tax rate is in the order of 11.6% on a rate of 12.5%; therefore, for all intents and purposes, they are the same. Senator Barrett would know the answer to this, being a transport economist, but I recall that when I was spokesperson on transport, the cost of bringing our goods to the market was twice the European average. We need some advantages, being an island, to give us the opportunity we need.
On the same issue of tax, the current Prime Minister of Italy, Mr. Monti, who used to be a Commissioner, produced what is called the Monti report, in which he stated that corporate tax competition is a good thing because it keeps everybody on their toes. There may be much talk about this issue, but I do not see grounds for any major change in the future. If one were to happen it would require unanimous agreement on behalf of the member state governments. There would certainly have to be something in it for Ireland to agree to that, and the same applies to Britain, France and other countries.
Senator Mullen asked about the moving of the European Parliament to Strasbourg.
Mr. Gay Mitchell
I missed that point and thank the Senator for reminding me. This frustrates MEPs terribly. For example, accessing Strasbourg is a nightmare. Although it is in France, no matter what way one goes, it takes about eight hours to get from Ireland to Strasbourg. Many MEPs from some of the eastern and central European countries and Cyprus have difficulty even getting to Brussels because direct flights are not available in all cases. The problem is that the treaties stipulate that the Parliament must sit at Strasbourg. This is much more strongly defended than the Shannon stopover, I can assure the House. For example, when I went to Strasbourg first, I could not get a hotel room in Strasbourg with the result that I had to stay in a place called Kork on the German side of the border. This is an issue which exercises both the French and the Germans. I had discussions recently on this matter with a senior official in the Parliament. The long-term solution might be to move the Council of the Regions and other bodies permanently to Strasbourg. The public outcry is being led in the Parliament by a British Member who is Vice President of the Parliament. He is quite rightly very exercised by this issue. However, his campaign makes it more difficult for the French to do something about it. A treaty change will be required. People are exercised about how to bring about that change. There is a range of institutions which could be located permanently at Strasbourg. An itinerant Parliament is not a good idea. Strasbourg is a nice, small place but moving around is very costly. However, it is necessary to remember the value rather than the cost of things. The European Union is a work in progress; we are not there yet. I expect the Parliament will have one location when everything settles down.
I sincerely thank Mr. Mitchell for coming before us today and for giving a paper which was quite interesting and compelling. I also commend the manner in which he dealt with the subsequent corollary questions. As Senator Mullen said, he is very much in command of his brief. He has had a long and successful political career and has been quite a strong performer at elections. To a certain extent he would be called a politician's politician which is one of the reasons I did the unthinkable and gave Fine Gael a vote at the last presidential election.
That is an admission.
That is on the record of the House now.
I put it on the record before. I can assure the Leader that I am fully cured.
In response to an earlier question, Mr. Mitchell contrasted the different styles of parliamentary activity vis-à-vis the Dáil and the European Parliament. We inherited the confrontational politics from the mother of parliaments in England and there is a more consensus type approach in Europe. Are there aspects of the European parliamentary interaction that could be delivered here? I am not referring to this House but rather in the Dáil where it is adversarial all the time. Mr. Mitchell was quite a good man at the adversarial stuff himself when he was here as I remember. There may be some particular elements which could improve business in Dáil Éireann.
Does Senator O'Sullivan wish to clarify if it was a No. 1 vote?
Do not push it too far.
I will not make any disclosure about voting. I welcome Mr. Mitchell. I commend him not only for his excellent paper but also, as others have said, for his great command of the brief as shown by his answering a very wide range of questions from Members. All of us would welcome his suggestion that we might extend an invitation to Baroness Catherine Ashton to speak in the House when she is in Dublin. That is an excellent suggestion. It fits in with a question I wish to ask. It refers to his immense work in the area of development and development aid. I am struck by what Senator van Turnhout said about the link between conflict and poverty. I note how much the European Union has given to Palestine over a long period of time in order to support infrastructure within Palestine, particularly over periods of time when Palestinians were under a great deal of attack and when conflict was being perpetrated. We note the immense poverty in the Gaza Strip as a result. I have always wondered why the European Union is not more proactive in trying to broker a solution between Palestine and Israel in order to achieve a resolution in that protracted and ongoing conflict, given the immense stake built up by the European Union in rightly supporting the Palestinians. Should Catherine Ashton be doing more for the peace process?
As a Dublin Senator from Dublin South-East, I welcome Mr. Mitchell. He is always very good to us in Dublin South-East and we respect him hugely. It is great that he is here today. On an issue of less macro-importance - it may be a macro-issue for us in Ireland - I refer to an issue which the horsemeat controversy has brought to light in recent weeks, namely, food labelling. I agree with Senator O'Brien's point about alcohol labelling. We could do more work on labelling information on the country of origin. I know there are hundreds of EU regulations and it may not be an issue on Mr. Mitchell's radar. However, it is an issue on which I have strong views. I do not mean to sound as if I am anti-EU but it is vital that we know where the produce comes from. Perhaps we could correspond on this matter.
I am delighted to welcome Mr. Mitchell to the House. I began my political life in Dublin South-Central with him. I also welcome Norma Mitchell. They say that in front of every great man there is a great woman. The name "Mitchell" stands for what is good in politics, what is good for Dublin and good for Europe. I remember his brother Jim, Lord have mercy on him.
I have a question on equality. Since the 1970s, 13 pieces of equality legislation have been passed by the European Parliament. Many people do not realise that much of the equality legislation now enjoyed in Europe to the benefit of men and women, has come from the European Union. Equality is still a work in progress with regard to workers' rights, women's rights, women in poverty and the career advancement of women. Is the European Unin as proactive now on equality as it was in the late 1980s and the early 1990s? It is a work in progress in Ireland and the European Union.
Mr. Gay Mitchell
I thank Senator O'Sullivan for his kind words and for the vote. The idea of rapporteurship would work here. The inter-institutional agreement, IIA, may be useful and we could borrow it. There could be an inter-institutional agreement between the Government, the Dáil and the Seanad to remove adversarial politics in some circumstances. This in turn would require Members to take responsibility as well as having a right to have their say. This should be explored. Matters could be decided without the whip but people would have to take responsibility.
I thank Senator Bacik for her kind comments. She is right about the issues of conflict and poverty. The European Union is not just the most significant contributor to Palestine but it is also the most significant contributor to the Middle East. Tony Blair is a former President of the European Council. He is very involved in the Middle East. He reports to the European Parliament from time to time. When I was a Minister, David Owen had that position. However, these individuals do not earn any publicity. The US Secretary of State is given massive publicity even though the European Union is the most significant contributor. The situation is at an early developmental stage. There is a Palestinian friendship group.
There is also an Israeli friendship group. Some of us take the view that if one is to have rows with the Israelis, they should be held privately, thereby resulting in a better chance of being heard by the Israelis. I certainly try to raise my concerns with them. I also try to raise with the other side the right of Israel to exist. Everybody hopes the outcome will be a two-state solution. In the meantime, we need a humanitarian approach to dealing with the issues.
The question of the origin of food, raised by Senator Noone, has been pursued strongly by my colleague Mairead McGuinness. The origin of food is a really important issue for us and there are people exercised by it. Ms McGuinness will be addressing the House soon and the issue may be raised with her. She has been very active in this area. I thank Senator Noone for her kind comments.
I thank Senator Keane for mentioning Norma, the power behind the throne. She is always the person who takes the leadership role on all the issues we need to address. I thank the Senator for her kind words about me and my brother.
Senator Keane asked whether the European Union is as proactive as it used to be. It is. It is very much an issue on the agenda of the Parliament, the Commission and the Council. We are exercised by access to boardrooms by female non-executive directors. I do not generally favour quotas, but I did support the 40% quota because we just have to do something to break down the barriers. With regard to executive directors, there is an effort to persuade companies to put in place a voluntary programme in this regard. These are issues that greatly concern the European Union at a very central stage. There is a women's affairs committee in the Parliament and it is very active.
It has been a great honour to have had the opportunity to address the Seanad on this special occasion. My colleagues will be looking forward to appearing before it also. I spoke about the foundation of the State and what happened in 1916. This is our national Parliament and I am very proud of it. I am very proud to be a Member of the European Parliament. I was a Member of Dáil Eireann for 26 years and I am really very proud of our Parliament and what it has achieved. It is really time that, in addition to giving criticism where it is due, we returned to giving credit where it is due. There should be a greater balance in the way we address the issues of the day. Greater credit must be given to the role of Deputies and Senators in the functioning of the Parliament. There is nothing in it for the Seanad this morning to have me here. However, it is useful exercise. It has certainly been a useful exercise for me and it helps me to focus to a greater extent on what the Senators regard as relevant. I sometimes wonder whether I have got it right. This certainly helps me to do that.
On behalf of the House, I thank Mr. Gay Mitchell for addressing us. We had an excellent exchange of views this afternoon. Mr. Mitchell was the first of the MEPs to address this Seanad and we hope to have more addresses in the coming months during the EU Presidency. We also hope to have a number of European Commissioners addressing the House.
We certainly welcomed Mr. Mitchell's comments on this House. We have no intention of duplicating the work of committees in the Houses but we intend to have an active exchange of views on European affairs. In that regard, we are not being afforded the staffing resources required to carry out our duties but the Members will carry out those duties nevertheless. We are intent on having greater scrutiny of EU programmes and directives. We would welcome any help that Mr. Mitchell can give us in that regard. I thank him for attending. It was an honour to have him here. We hope it will not be his last visit to the House.