Go raibh míle maith agat. I was here ten years ago so I must have been okay because I have been invited back. I am glad to be here on this very important day. We are marking Europe Day. I spent yesterday morning going back to the classroom. I visited all of the classes in three schools. What struck me was that all of the children were born after we voted to join the European Union. They know no different than being part of Europe but it is still important for them to understand history.
I will start today with a little of that history. It is important to recall that prior to a movement towards a European economic community we had war. We had horrible war. Then we had the wisdom of a former French foreign minister, Robert Schuman. He had a vision of uniting Europe to make war between Germany and France in his words not merely unthinkable but materially impossible. He also said "Europe will not be made all at once, or according to a single plan. It will be built through concrete achievements which first create a de facto solidarity". This is worth recalling after 50 years of membership because it is not yet complete. This morning I want to reflect briefly on the achievements and setbacks, where we stand today and, more importantly in this more fragmented world, where we are heading towards.
A resounding 83% of Irish voters said "Yes" in the referendum to join the EEC. As the Cathaoirleach mentioned, the 51st anniversary of that vote will be marked tomorrow. Over time, Europe has developed step by step. These steps have not always been in a forward direction but we have made great progress. What has moved for Ireland is our place in Europe. We were on the periphery. We were a relatively poor country economically on the edge of Europe. Now we are a much more prosperous country at the very heart of the EU. We are one of the older member states. We probably think we are still young but we are old in terms of membership. We were part of the EEC's very first expansion beyond the original six members.
For many years we were a net beneficiary. Today, because of how we have grown and prospered, Ireland is a net contributor to the European Union's budget. In the early 1970s our economy was relatively underdeveloped. We had a very strong and solid agriculture and agri-food sector but a small number of other industries. We were very dependent for trade on the UK, our closest neighbour. If we look at social issues, divorce, contraception and homosexuality were not then legal in Ireland. We still had the marriage bar that excluded many women from working after they got married.
It is also important to recall in these times of peace in Northern Ireland that the Troubles at that time were at their very height. Ireland joined with the United Kingdom and Denmark all those years ago, yet seven years ago the UK voted to leave the EU. When I wrote down seven years, it shocked me because it feels like yesterday. It is true that Brexit is just another chapter in the EU story. It did not actually rupture the EU but instead it provided an urgency about strengthening our vows, which is what happened. Ireland very much appreciated at that post-Brexit time the value of EU solidarity that Robert Schuman talked about in the 1950s. In many debates in the European Parliament on the topic of Brexit, it was really impressive to listen to members from other counties such as Germany, Croatia and Portugal, to mention a few, in the chambers in Strasbourg and Brussels speaking about the issues impacting Ireland and Northern Ireland. I thought it was an important moment in European integration, which frankly we need more of, when members spoke of the needs of other member states. Let us look to Denmark. In the 1970s, Denmark, like the rest of the world, faced an oil crisis but it was clever and strategic because it invested significantly in wind energy. Would we all had done at that stage because we are now trying to ramp up investment in renewable energy production at speed.
I wish now to look to the present, the past 50 years and where we are now. The economy is modern and evolving and there is strong growth, high-tech skill sectors and global exports, including of course to the Single Market. We also have free-flowing inward investment. The Cathaoirleach rightly referenced that the European Single Market is what really drove our economy because of the freedoms it provided for. Equally, the social and civil fabric of society changed dramatically. EU law on gender equality helped bring an end to the marriage bar and supported moves towards equal pay and parental leave but this is not yet finished business. We still have work to do. There were setbacks. As I looked through the books and some of the films rather than video, we all of a certain age remember beef mountains - younger Members may not. There were food scares and, of course, the financial and sovereign debt crisis. We dealt with Covid, Brexit and now with Russia's illegal invasion of Ukraine. With each of these crises, in the past or more recently, there was a realisation that a common European response was the only way to deal with them. In the food sector, for example, the European Food Safety Authority, emerged after a series of quite problematic food scares. Today, Europe leads in rapid alert systems to detect and stop problems in the food chain with speed.
Brexit was an existential crisis for Europe. It posed the question about the fact that a big member state would leave. The EU 27 pulled together. We are very united in finding a way forward. We reached the withdrawal agreement and then the EU-UK Trade and Cooperation Agreement. More recently, after many difficult setbacks, there was the Windsor Framework. This was all about recognising the unique situation of Northern Ireland and wanting to make sure there were no borders on the island of Ireland. Now, Northern Ireland remains in the Single Market. The Windsor Framework also allows the EU and UK to leave behind the worst days post-Brexit, which were very difficult days in the relationship. Our reaction to Covid in the beginning was very difficult and divided and then there was a realisation that we had to act together and have a common European response, whether it came to protective equipment, vaccines or indeed the app on our phones to allow us to travel. What emerged from that crisis was that public health, which was for member states only, is now regarded as an area of EU competence, giving the Commission more responsibility for policy. We see that over time that while member states have policy areas they hold dearly, when there is a crisis bigger than any one can handle alone, there is a realisation that Europe needs to do it at the level of the European Union. Our reaction to the illegal invasion by Russia of Ukraine was to show very strong solidarity with the people of Ukraine.
If one looks at what happened during the global financial crisis, it is very clear that this still has a bitter taste for many families and business, even though it was some time ago. However, we learned hard lessons from that crisis. Today, we have a much stronger eye on and supervision of the banking and pensions system, and the securities markets, with all of the authorities we have established. We also have the European Systemic Risk Board, which is for oversight of the entire EU financial system. We started on our work to complete banking union. This is about providing a strong European banking system to serve our economy and society. Clearly, we need the capacity of public authorities to respond effectively if and when a bank fails.
My role is around the financial system. The title is rather large but it is essentially about money. The point I make, as many Senators will in their work representing people, is that money matters. It is the backbone of our economy and society, and it matters most to those have too little of it. In my work, despite all the stuff I do on regulation and deep, technical issues, I really want us to talk more about financial awareness and financial literacy. We need to have many more money savvy citizens, particularly in an era when finance is digital. Citizens may not know everything about the detail of the financial system but if they have the confidence to ask questions about the interest rates they are being charged or the services they are being given, they will make better choices. Society, families and everyone will benefit from that. Look at the world that is evolving around crypto. Very soon, because of EU regulation, we will have a system in place to protect citizens and reduce the risk of crypto being used in money laundering. As we know, that is sadly happening today. Europe is leading on regulation.
One of the topics being debated in both Houses is the use of cash. As we all move to more digital transactions, we are seeing the use of cash decline. We are working with the European Central Bank, ECB, on a possible digital euro, a central bank digital currency. The idea here is to complement cash, not to replace it, and I am sure Senators have some thoughts on that very important topic. Sweden, which was moving ahead of most with regard to a central bank digital currency, has received a report from its parliament about maybe not rushing so fast and so far, but also recognising that there are citizens who want and should be allowed to use cash in their transactions.
We need an awful lot of investment as we move towards this climate agenda, biodiversity loss and the digitalisation of society generally. Despite 30 years of a Single Market, we do not actually have a single market in capital. It is one of the areas where we really need to make progress and we need the support of member states to do that. We are working at Commission level to create deeper capital markets because what we want to do is to provide large and small business with alternatives. At the moment, it is mainly bank financing. If and when we develop deeper capital markets, businesses will have a choice.
That is about the past and the present. Let us look to the future. I think the coming years will be decisive for the European Union for a whole host of reasons with which Senators are familiar. This is not just the climate crisis we are facing but also the related environmental challenges, such as pressure on water, soil and biodiversity. On all these areas of policy, the European Union is setting the agenda. We have the European Green Deal, which aims for climate neutrality by 2050. We are asking all areas of our economy and society to change, including ourselves. One area I spoke a lot about ten years ago, when I was on the European Parliament's Committee on Agriculture and Rural Development, was about the changes farmers are having to make or are being asked to make. It is important for us to acknowledge a few things because it is no longer the case that the Common Agricultural Policy drives agriculture. It is more about climate policy, environment and health. Change is happening. I hope I am not the first to acknowledge - I think we all have to acknowledge this - that it was public policy of the past to drain land, and we grant-aided farmers to do so, including draining bog land. It was the policy to maximise production, eking out every corner of a field to get production up and running and enlarging fields by ripping out hedgerows. I was guilty. I was on a programme some Senators will have never heard of, "Landmark" on RTÉ, and we specialised in all of the above.
Yet, my first year on "Ear to the Ground" in 1997, when that programme started, was about teaching farmers how to reverse all of that - how to plant hedgerows, maybe not draining land so much and watching the use of inputs. We have to acknowledge, because farmers need to hear this, that some of the policy choices we made were not the right ones and some of them went too far. When we are asking people to change, we need to understand where they are coming from and explain why public policy has evolved. Frankly, I do not think we have done a very good job of managing the process or giving farmers ownership of it. Many are taking action. It is under the radar but they know they have to address both climate and environmental issues. The truth is we need much more of it but the worry I have is that we will get less change if we alienate those who can make the change happen because they need encouragement, not criticism.
On top of the climate challenge, we have geopolitical challenges, as Russia's war in Ukraine continues. We had the weaponising of gas by Russia. That was a very dramatic wake-up call for Europe and we reacted - we diversified our supply chain and we filled gas stores. What is really interesting is that we were much more efficient in how we used energy, for example, we turned out the lights when we did not need them on. Small things matter. Business and industry also realised that they could be much more efficient in how they used energy. That was all to the good, even though it was learned under very harsh circumstances.
Today, the world is much more multipolar. If we look to our relationship with China, it is very much defined by Commission President Ursula von der Leyen as involving a process of de-risking and not decoupling. We do not want to cut ties but we have to look at where we might be overreliant on China and, indeed, other partners for vital components of the renewable energy sector. We then need to address that by strengthening our own capacity where that is strategically necessary. This comes under the policy of open strategic autonomy, which is very much to the fore as we face all of these challenges. We are also strengthening our relationships with other partners, like the United States and the G7, where we have taken the same steps on sanctions against Russia in response to its illegal invasion of Ukraine.
Looking to industry and the European Green Deal, we have the green deal industrial plan. Here, we are talking about making Europe the home of clean-tech and innovation on the way to net zero and about supporting EU competitiveness. Under the Swedish Presidency, there is a huge focus on competitiveness. We are doing that not only in regard to the industrial plan but also the Net-Zero Industry Act and the Critical Raw Materials Act to strengthen our supply chains in Europe. One of the things we may need to face up to is that we need to carry out more mining in Europe to meet the needs of battery production and other components of the renewable energy sector. In the past and, indeed, the present, we have tended to import and we are not really looking at what the mining sector is doing in other places, so that is going to be a challenge for us. We need to press ahead with the circular economy, that is, minimise dumping and maximise recycling.
All of this will help us to create that Europe of the future but it needs a huge amount of investment. That is why I mention capital markets union because public funding is important but it is not going to be enough. The term “sustainable finance” is certainly top of the agenda. What that essentially is about is trying to identify for investors the companies and entities that are moving towards sustainability and addressing all of the challenges of being overreliant on fossil fuels and, if they are doing harm to the environment, addressing that as well. Investors need information and companies have to provide that information. I heard reports this week that they are concerned about it. There is a lot of pressure because companies will have to do more, but there is also an opportunity for companies to show their credentials around climate and the environment. I think they will gain from that rather than be worried about the burden it places on them. We want the money to go to the right places rather than ending up in investments that will not yield the results we need.
Another area where I know the debate is beginning here is around security and defence, not traditional areas where Ireland takes strong views, but I think we are mature enough to know we have to have a conversation. I very much welcome that the Taoiseach and the Tánaiste are looking at how best to hold this very broad conversation on this topic, which is really welcome. It should be open without having already decided what the outcome should be.
We are mature enough as a society to have a conversation around defence and neutrality. We should not just think of security and defence in terms of armies and neutrality, however. Look at cybersecurity. We are all extremely vulnerable from cyberattacks. We know what happened with the HSE in 2021. The financial system, for which I am responsible, is subject every second of the day to attacks. We have to be mindful that the system needs operational resilience. We have just passed that legislation. We need to react and are reacting to the challenge and building up resilience around cybersecurity.
I mentioned the digitalisation process and the evolution of the crypto space, which a younger audience is perhaps more engaged in than in other areas. We need to manage that very well. Recently in the US we saw some instability in the banking system and, while much of it may have been due to bad management and poor risk management in particular, we should not be complacent in Europe, but rather be mindful, if there are vulnerabilities, that we need to address them. What was interesting about the US experience was the speed at which money could move. You did not need to queue outside your bank. That is the traditional picture of a bank run, but it was done by a click, probably on a mobile phone, and word spreads much quicker today by social media.
I mention artificial intelligence, not to come to any conclusions about it but because it is a new horizon which brings deep concerns and potential benefits. Every sector will be impacted, as potentially will be the legislative process. That is one to mull over.
In sensitive areas, including budget, common foreign and security policy, taxation and EU enlargement, we have to have unanimity. Everyone needs to agree at the table. A question being asked is whether unanimity should be maintained forever and for the future. What are the consequences of that? Right now, it means everyone has equal weight. If you have a problem with a policy, you can block it. That is the right of member states but it gives huge power to any member state to block a proposal against the wishes of the rest. In other areas, Ireland’s position has evolved over time, in particular in respect of corporation tax rates. As a former Member of Parliament, I defended at that time our view around tax rates on companies. It was sacrosanct and was viewed as critical to continued economic success. Our position adapted, moved and evolved because we saw there was a global effort to have an agreement around corporation tax frameworks. We recognised the need for change and realised there would not be negative consequences for the economy. It also allowed us to show solidarity with member states moving in that direction. Over 50 years, there are things that have changed utterly, things we never discussed previously, but now we realise in these policy areas, there was a need to move forward.
An area we need to talk about is the EU budget. The most frequently asked question for a Member of the European Parliament is whether there is a budget for various community activities or whatever. As Europe gets bigger in terms of policy responsibilities, the budget needs to increase, but we know many member states are reluctant to pay more into it. A significant development happened around NextGenerationEU, which was joint borrowing by Europe for the first time and was necessary to fund the recovery and build resilience after Covid.
With all those changes, it is important to continue to build a strong connection between citizens and decision-making. Senators have a responsibility, and they take that, to ensure what happens in Brussels does not stay there. Blaming Brussels for problems that are not entirely of our making is unlikely to change. That is the nature of politics. Constructive criticism has its place because it needs to be pointed out where Europe is not delivering, rather than clapping ourselves on the back 50 years later and saying all is good. We have come a great distance and achieved much but we can always do better.
As we mark 50 years of membership, we should recall with some poignancy that in Ukraine today, the President of the Commission, Ursula von der Leyen, is in Kyiv showing immense solidarity with the people of that country, who have faced horrible attacks, including overnight. We wish them strength as they continue in this struggle.
In conclusion I want to take a moment to pay tribute to the work of the Commission President, Ursula von der Leyen. She has led in enormously difficult times and taken brave decisions with Commissioners. It is extraordinary to say that she is the very first female Commission President after six decades. It is quite an extraordinary reality. As I said, she has worked tirelessly for Europe, not just dealing with problems, but also trying to look at and shape the Europe of the future. President von der Leyen leads the first gender balanced College of Commissioners ever. I firmly hope that it will not be the last because balance matters.
