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Discussions with European Leaders

Dáil Éireann Debate, Tuesday - 26 November 2013

Tuesday, 26 November 2013

Questions (1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38)

Gerry Adams

Question:

1. Deputy Gerry Adams asked the Taoiseach the contact he had with other EU leaders over the summer recess. [39079/13]

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Micheál Martin

Question:

2. Deputy Micheál Martin asked the Taoiseach if he has had discussions with Chancellor Angela Merkel recently; and if he will make a statement on the matter. [39086/13]

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Joe Higgins

Question:

3. Deputy Joe Higgins asked the Taoiseach if he will report on the meetings he had with other Heads of State since the adjournment of Dáil Éireann in July. [39139/13]

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Joe Higgins

Question:

4. Deputy Joe Higgins asked the Taoiseach if he will report on meetings he had with other European leaders since the adjournment of Dáil Éireann in July. [39140/13]

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Micheál Martin

Question:

5. Deputy Micheál Martin asked the Taoiseach if he has written to Chancellor Angela Merkel since her re-election; and if he will make a statement on the matter. [40517/13]

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Gerry Adams

Question:

6. Deputy Gerry Adams asked the Taoiseach if he has been in contact with Chancellor Angela Merkel since her re-election as German Chancellor. [40733/13]

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Gerry Adams

Question:

7. Deputy Gerry Adams asked the Taoiseach if he has any plans to meet with the German Chancellor, Angela Merkel. [40734/13]

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Richard Boyd Barrett

Question:

8. Deputy Richard Boyd Barrett asked the Taoiseach if he will report on his most recent discussion with Chancellor Angela Merkel; and if he will make a statement on the matter. [40916/13]

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Richard Boyd Barrett

Question:

9. Deputy Richard Boyd Barrett asked the Taoiseach if he will report on meetings he has had with European counterparts since the summer recess; and if he will make a statement on the matter. [40918/13]

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Richard Boyd Barrett

Question:

10. Deputy Richard Boyd Barrett asked the Taoiseach if he raised the issue of Ireland's unemployment rate at the October meeting of the European Council; and if he will make a statement on the matter. [40922/13]

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Micheál Martin

Question:

11. Deputy Micheál Martin asked the Taoiseach if he has spoken to Prime Minister Samaras recently; and if he will make a statement on the matter. [41823/13]

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Micheál Martin

Question:

12. Deputy Micheál Martin asked the Taoiseach if he has spoken to Prime Minister Rajoy recently; and if he will make a statement on the matter. [41824/13]

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Micheál Martin

Question:

13. Deputy Micheál Martin asked the Taoiseach if he has spoken to President Hollande recently; and if he will make a statement on the matter. [41825/13]

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Micheál Martin

Question:

14. Deputy Micheál Martin asked the Taoiseach the issues he will place on the agenda at the next EU leaders' meeting; and if he will make a statement on the matter. [44409/13]

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Micheál Martin

Question:

15. Deputy Micheál Martin asked the Taoiseach if he has spoken to Chancellor Angela Merkel since the general election in Germany; and if he will make a statement on the matter. [44411/13]

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Thomas P. Broughan

Question:

16. Deputy Thomas P. Broughan asked the Taoiseach the engagements he has had with Chancellor Merkel since the recent general election in Germany. [45728/13]

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Micheál Martin

Question:

17. Deputy Micheál Martin asked the Taoiseach if he had any bilaterals at the EU Council meeting; and if he will make a statement on the matter. [46203/13]

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Richard Boyd Barrett

Question:

18. Deputy Richard Boyd Barrett asked the Taoiseach the issues he raised with our European partners at the European Council meeting on 24-25 October; and if he will make a statement on the matter. [47668/13]

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Richard Boyd Barrett

Question:

19. Deputy Richard Boyd Barrett asked the Taoiseach if he had discussions regarding Ireland's exit from the troika programme at the European Council meeting on 24-25 October; and if he will make a statement on the matter. [47669/13]

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Richard Boyd Barrett

Question:

20. Deputy Richard Boyd Barrett asked the Taoiseach if he had discussions regarding Ireland's debt situation at the European Council meeting on 24-25 October; and if he will make a statement on the matter. [47670/13]

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Gerry Adams

Question:

21. Deputy Gerry Adams asked the Taoiseach if he spoke with British Prime Minister David Cameron at the recent European Council meeting in Brussels. [47674/13]

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Gerry Adams

Question:

22. Deputy Gerry Adams asked the Taoiseach the meetings he held with other European leaders on the margins of the recent European Council meeting; and if he will make a statement on the matter. [47680/13]

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Gerry Adams

Question:

23. Deputy Gerry Adams asked the Taoiseach if he spoke to Chancellor Angela Merkel at the recent European Council meeting; and if he will make a statement on the matter. [47681/13]

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Gerry Adams

Question:

24. Deputy Gerry Adams asked the Taoiseach the discussions he had at the recent European Council meeting on the issue of alleged bugging by the United States’ National Security Agency of Chancellor Angela Merkel’s telephone and of other surveillance carried out in France and Italy. [47682/13]

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Gerry Adams

Question:

25. Deputy Gerry Adams asked the Taoiseach if he raised the issue of youth unemployment at the recent European Council meeting; and if he will make a statement on the matter. [47687/13]

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Gerry Adams

Question:

26. Deputy Gerry Adams asked the Taoiseach the discussions he had at the recent European Council meeting on Ireland’s exit from the EU-IMF bailout programme; and if he will make a statement on the matter. [47691/13]

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Gerry Adams

Question:

27. Deputy Gerry Adams asked the Taoiseach the proposals he will seek to place on the agenda for December’s European Council summit; and if he will make a statement on the matter. [47692/13]

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Gerry Adams

Question:

28. Deputy Gerry Adams asked the Taoiseach the proposals in respect of the banking union he will raise at December’s European Council summit; and if he will make a statement on the matter. [47693/13]

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Thomas P. Broughan

Question:

29. Deputy Thomas P. Broughan asked the Taoiseach if he will report on his engagements with other members of the European Council on the issue of the reported monitoring of telephone and electronic communications of citizens and political leaders across a number of countries by intelligence services from other countries. [47729/13]

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Micheál Martin

Question:

30. Deputy Micheál Martin asked the Taoiseach the topics discussed at his meeting with the Italian Minister Enrico Letta; and if he will make a statement on the matter. [48812/13]

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Micheál Martin

Question:

31. Deputy Micheál Martin asked the Taoiseach if he had any bilateral meetings while attending the Youth Unemployment Conference in Paris; and if he will make a statement on the matter. [50118/13]

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Micheál Martin

Question:

32. Deputy Micheál Martin asked the Taoiseach if he will detail his contribution at the Youth Conference in Paris; and if he will make a statement on the matter. [50120/13]

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Micheál Martin

Question:

33. Deputy Micheál Martin asked the Taoiseach if he discussed the option of a safety net post the exit from the EU-IMF programme with Chancellor Merkel; and if he will make a statement on the matter. [50148/13]

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Micheál Martin

Question:

34. Deputy Micheál Martin asked the Taoiseach if he discussed the option of a safety net post the exit from the EU-IMF bailout with Prime Minister Cameron; and if he will make a statement on the matter. [50149/13]

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Micheál Martin

Question:

35. Deputy Micheál Martin asked the Taoiseach if he discussed the option of a safety net post the exit form the EU-IMF programme with President Hollande when he was in Paris recently; and if he will make a statement on the matter. [50150/13]

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Gerry Adams

Question:

36. Deputy Gerry Adams asked the Taoiseach if he spoke to Chancellor Angela Merkel at the recent EU meeting in Paris regarding the decision not to seek a post bailout line of credit; and if he will make a statement on the matter. [50214/13]

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Gerry Adams

Question:

37. Deputy Gerry Adams asked the Taoiseach if he will report on his telephone conversations with Chancellor Angela Merkel, Italian Prime Minister Enrico Letta and Finland's Jyrki Katainen on the decision not to seek a post bailout line of credit; and if he will make a statement on the matter. [50218/13]

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Micheál Martin

Question:

38. Deputy Micheál Martin asked the Taoiseach if the EU growth figures were discussed at the recent EU leaders' meeting; and if he will make a statement on the matter. [50292/13]

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Oral answers (103 contributions)

I propose to take Questions Nos. 1 to 38, inclusive, together.

I participated at the European Council on 24 and 25 October, the outcome of which I reported in detail to the House on 6 November. I also travelled to Paris on Tuesday, 12 November for the second conference on youth employment in Europe at the invitation of President Hollande. I was accompanied in Paris by the Minister for Social Protection, Deputy Joan Burton. I had informal contacts with a number of colleagues at each of these meetings. Separately, I spoke with Chancellor Merkel on 25 September and sent a letter of congratulations to her on the election result.

The Paris event was organised by President Hollande to maintain political momentum behind address of the youth employment challenge. This included identifying concrete actions towards implementing the youth guarantee agreed by the Irish Presidency in February. It followed a similar event organised by Chancellor Merkel in Berlin in July. My own contribution focused on digital skills and the potential of the digital economy generally, including in light of the October European Council and the recent Dublin web summit. I believe the discussion reflected well the huge priority being accorded to this issue which is affecting member states across Europe.

Following on from my visit to Rome last November, Prime Minister Enrico Letta visited Dublin at my invitation on 7 November last. We agreed that the visit marked the start of a more strategic, structured Irish-Italian engagement on EU issues. We discussed the range of current EU issues, with a particular focus on banking union-EMU and youth unemployment.

Following the Government meeting of Thursday, 14 November, I announced in this House the Government's decision to exit the troika programme. Subsequently, I spoke with a number of European Council colleagues, including Chancellor Merkel, Italian Prime Minister Letta and Finish Prime Minister Katainen, to inform them of the decision taken by the Government regarding our exit from the troika programme. In these calls, I explained the decision we had taken and the key reasons behind it, namely, favourable market and sovereign conditions; strong cash reserves, historically low sovereign bond yields; public finances under control, with the Government committed to reducing the deficit to less than 3% in 2015 and putting the debt ratio on a downward path; strengthened governance at European level with the two pack, six pack and the stability treaty, the introduction of the ESM and the major efforts by the ECB to do whatever it takes to safeguard the currency; and improving domestic and international economic conditions and sentiment. I thanked them for their support to Ireland over the past three years and looked forward to further support in the future.

In relation to the October and December European Councils, I made a detailed statement to the House on 6 November in relation to the October European Council and do not propose to repeat it today.

With regard to December's European Council, President Van Rompuy has prepared an annotated draft agenda which builds on the work done in October. The agenda was considered by the General Affairs Council on Tuesday, 19 November and will be considered by it again in December prior to the Council. The meeting is expected to cover economic and monetary union, including banking union; economic and social policy, including SME financing and taxation; common security and defence policy; enlargement; migration; and energy. Of these, banking union is currently the outstanding political priority across the Union. We are committed to following through on the decisions we have already made on banking union, and December's Council will be particularly important in that regard. I will, of course, make a statement to the House in December ahead of the Council meeting, and subsequent to it.

I understand the need for questions to be grouped, but there are 38 in this particular grouping. As such, I hope we will have an opportunity to make several contributions.

I will be happy to accommodate Deputies.

Thank you, Taoiseach. Two weeks ago, the Minister for Finance, Deputy Michael Noonan, told the Joint Committee on Finance, Public Expenditure and Reform there would be no discussion at the forthcoming ECOFIN meeting of Ireland's exit from the bailout and that he had not yet finished his round of meetings on the margins of the Eurogroup. Less than 24 hours later, an emergency Cabinet meeting took place followed by statements to the Dáil. What happened between the end of the finance committee meeting at noon on Wednesday, 13 November and the panic of Thursday morning, 14 November? It seems clear that pressure came from somewhere and the Government rushed into a decision. Did the Taoiseach receive a telephone call on the Wednesday afternoon from Chancellor Merkel? Did he have any contact with her on the Wednesday or Thursday? Was the issue of a precautionary line of credit discussed with the Chancellor or any other of the EU leaders with whom he has recently spoken or met?

The Government has proclaimed that exiting the bailout and the decision not to seek a post-bailout credit line is this State's reassertion of its economic sovereignty. That is a nice line but we are all aware that, in reality, it is far from the truth. Is it not a fact that until the loans received from the troika are substantially paid down, we face twice yearly monitoring by the Commission of our books? Is it not true that the Commission will conduct, in liaison with the European Central Bank, regular review missions to assess our economic, fiscal and financial situation? Media reports have stated clearly that this process could continue for decades. Will the Taoiseach comment on that? In addition, the fiscal treaty, for which he energetically pushed, requires that we continue to be monitored. As of next year, our budget proposals will be the subject of budgetary surveillance by the Commission, with the latter to issue an opinion on budget 2015. There is also the risk of further conditions being applied until we get our structural deficit to 0.5% and our debt-to-GDP ratio to 60%. Unless or until the Taoiseach sorts something out with the European Stability Mechanism in regard to retroactive bank recapitalisation, that ratio will not be achieved any time soon.

It is a fallacy to say we have regained our economic sovereignty because sovereign states do not get twice yearly visits from officials in Europe to ensure they are following orders on economic policy. Our economic sovereignty will not be regained until Irish Governments - with respect, it will not be the Taoiseach's Government - start formulating budgets in alliance with and in the interests of the Irish people and when the approval of the Irish people is the only approval the Government is seeking. The truth is that while the troika may be leaving, the troika mindset remains in this Government. Over the Taoiseach's two and a half years in office, we have seen him slavishly follow the policies of the last Fianna Fáil Government and clutch to the embrace of austerity.

Will the Deputy put a question to the Taoiseach?

The Government has damaged and hurt the most vulnerable in Irish society, sometimes at the bidding of its European masters.

Will the Taoiseach set out what happened in respect of the decision regarding the bailout exit? What was the choreography and what conversations took place? Was one of those conversations with Chancellor Merkel in respect of the announcement he made in the Dáil on Thursday, 14 November? Will he explain the difference between the position of the Minister for Finance at noon the previous day and his own position in the Dáil? In addition, will he comment on the further austerity measures and consolidation that will be necessary despite the troika leaving town?

For somebody who aspires to the leadership of her party and does not believe at all in Europe, Deputy McDonald makes a long speech about a lot of issues. She asked me what happened in respect of the decision on the bailout exit. The Government made a clear, precise and courageous decision, arising from the sacrifices made by the Irish people in recent years, about the formal closure of the bailout programme in which this country has been involved. That is what happened.

Before the Minister for Finance went to the ECOFIN meeting, where there were some comments about the position of Spain and what it might do, the Government, on behalf of the Irish people, looked at the options, of which there were three. First, we could leave with a precautionary credit line from the EU-IMF; second, we could leave with a precautionary credit line from the IMF; or, third, we could let the programme formally end without seeking any precautionary credit line. The Cabinet discussed these options and made a decision, not as a result of any emergency meeting, not as a result of any telephone calls from certain people and not as a result of pressure, but at the right time, making the right decision based on the information available to us and taking into account the circumstances in which the country finds itself. Those circumstances were very much improved from what was inherited just two and a half years before. Specifically, the National Treasury Management Agency was able to go back into the international markets and able to do so very strongly, selling Irish bonds at less than 4% - down from 15% two and a half years before. Exports are running at an all-time high and a buffer zone of more than €20 billion has already been built up by the NTMA. Furthermore, the €500 billion backstop available to all other eurozone countries is likewise available to Ireland.

Those were the circumstances in which we made our decision. There were no pressurising telephone calls. A very clear decision was made by the Government, on the recommendation of the Minister for Finance, and the Tánaiste and I having discussed these matters in Brussels, Frankfurt, Washington and with other leaders on different political occasions.

The Deputy made several assertions about sovereignty. The fact of the matter is that on 16 December, the barrier that surrounded Ireland in terms of its bailout programme will no longer be there. Does that restore our full economic sovereignty? No more than any other eurozone country, we are subject to the two-pack and six-pack requirements and will comply with those regulations. The bailout programme meant 12 quarterly, deeply analytical and deeply invasive visits from troika personnel in order that the conditions with which Ireland was required to comply would be fulfilled. Those conditions were fulfilled. The Deputy observed that the troika will continue to pay twice yearly visits for a considerable period. Every country in the eurozone will be subject to a regular visit. Ireland, because we are emerging from a bailout programme, will have a second, as will other countries in the same position.

For the time ahead there is greater flexibility for the Government and, therefore, for our country in terms of what we do. We have set out a programme to have our deficit below 3% by 2015. We will continue that momentum.

We will continue to take decisions based on being more competitive and, as I have said on many occasions, on opening the doors of opportunity for job opportunities to be created. While it does not put us in a place where we have a budgetary surplus, it does give us the opportunity to have a small primary surplus this year and to start to reduce the scale of our debt, which became so big over the years that the rating is not as strong as we would like. That is why, on exiting the bailout programme, discussions are already taking place between Department of Finance officials and German finance ministry officials about being associated with and being part of a structure dealing with the Germany AAA-rated development bank for access to credit for small and medium enterprises. That is a positive signal.

It is a case of the Government coming to a decision that it was the right time for Ireland, that it was the right decision to make and then going ahead and making it clearly. I am pleased that independent objective reports, comments made publicly by the Governor of the Central Bank, comments made publicly by the director of the National Treasury Management Agency and reflections by the ratings agencies, interested business people and investors strongly support the decision.

We hope to move on now and have Europe make strong and clear decisions in different countries. Our remit is to fix our public finances and get our people back to work. These are the two essential focuses of the Government and will remain so for the future.

It is not a case of other countries having to approve our budget before it is dealt with next October. Clearly, under the bailout programme Ireland was required to give draft budgets to the countries which were lending money to Ireland. No more than any other eurozone country, we have signed on to the two-pack and six-pack regulations and conditions, as have all the other countries. However, because we are emerging from a programme there will be a second visit here once every six months. That applies to all other countries that have conditions or a bailout programme applied to them as well.

I have 15 questions out of the 38. I appreciate that they are all related. I do not have a difficulty with the fact that there are 38 questions being answered at once, that is fair enough but I hope the Taoiseach will bear with me as I ask-----

We discussed that. I do not mind doing it another way.

I am for it. I accept it.

I understand that.

I only say as much as a preamble and because there may be several questions covering the 15 in my name. That is all.

I repeat my offer to have Priority Questions for the leaders of the Opposition.

The Central Bank Governor, Professor Patrick Honohan, has stated clearly that further capital injections will be required for our banks. A report at the weekend said the Government may give up a substantial part of its return from Bank of Ireland to increase its capital base. Whether we get a lower return than expected remains to be determined because of the necessity to make capital provision for Bank of Ireland.

It is the Government's position that the country wants the European Stability Mechanism to take the lead in possible capital increases for the financial sector. Will the Taoiseach outline to the House what preparations have been made for this? The sense is that the resolve to use the ESM as a basis for recapitalising troubled banks in the first instance is getting weaker. At a press conference in June last year, the Minister for Finance, Deputy Noonan, and the Minister for Public Expenditure and Reform, Deputy Howlin, referred to how Europe was likely to aid us in retrospective recapitalisation of our banks. A figure of up to €60 billion was used at the press conference without either Minister disagreeing. That was the position in June last year. Of course, we have had the Tánaiste's seismic shift and so on. What has happened to the prospect of retrospective recapitalisation of the banks? Is retrospective recapitalisation dead or alive? Will the Taoiseach comment on the matter?

The Taoiseach answered some questions relating to the October Council. At that meeting there was a significant issue relating to countries or their intelligence networks eavesdropping or spying on other countries. The Taoiseach and the Tánaiste have stated that they do not believe that the US National Security Agency has eavesdropped on our Government. To a certain extent that misses the point. The revelations state that the bulk of American interceptions in Europe have been carried for them in GCHQ in Britain. The issue for us is not whether the United States has eavesdropped on our Government but whether the United Kingdom has.

We have been involved in highly sensitive negotiations and discussions with the UK Government for well over two decades. Has the Taoiseach asked the UK Government whether any attempt was made to intercept our communications? Will the Taoiseach ask the British Government whether our Government has been the target of such surveillance? It is a straightforward question. Has the Taoiseach asked about it and will he ask about it?

The summits, including the last summit, dealt with the issue of the banking union, which is essential for Ireland and the eurozone. However, I put it to the Taoiseach that what is now on the table is a weak proposal and a significant dilution of what was originally envisaged. I am unsure about the Government's position on the current proposals. Will the Government continue to accept whatever emerges or does Ireland have a position that we are pushing for? Ireland is one of the few countries where we do not have on public record exactly what the Government is supporting at these meetings or in these talks. Will the Taoiseach outline the specific set of objectives that the country has for banking union?

I asked about the last budget and the exiting of the troika. A recent report in The Sunday Business Post quoted extensively from a joint memo of the Government and the troika concerning the different budget messages that would be sold to the Irish public and the European audience. This directly included the fact that different figures in the memo would be used depending on the audience. The figure was €2.5 billion for the Irish audience and €3.1 billion for the European audience. Will the Taoiseach release that memo to us in order that we can all see it and such that is not solely the preserve of a journalist in The Sunday Business Post, who, thankfully, probably got it from one or two Ministers? It would be useful if it could be circulated to the Dáil.

I asked in the Dáil last week during Questions to the Taoiseach if the Taoiseach would circulate a single piece of paper concerning the financial calculations that led to the decision not to take a precautionary credit line. The Taoiseach said he would raise with the Minister, Deputy Howlin, his clear promise on the public airwaves that he would release this document and information. Has the Taoiseach done that? Is he now prepared to release all background documentation that informed the Government's analysis about not taking the precautionary credit line?

The Irish Fiscal Advisory Council has said we should have taken the credit line. I recall meeting representatives of the council in a different context in September. They implored us to be responsible and constructive as an opposition and to support the Government's application for a precautionary credit line. I informed the people at that stage that we were supportive of taking a precautionary credit line for the best of reasons. Will the Taoiseach release the background papers? The Taoiseach did not do it for me in respect of the Seanad. He said he would give me background papers on the proposals to abolish the Seanad but he did not do so. Then, there was the famous Celtic spat with former French President Sarkozy but no documentation emerged following that either.

There has been consultation on a wide range of issues, particularly on the exit of the troika. Let us recall that on 6 September last, the Taoiseach and the Minister for Finance, Deputy Noonan, told the Irish Independent and Reuters that Ireland wanted a credit line of €10 billion. Two months later, the Taoiseach said the exact opposite but, as far as I can ascertain, not much happened in between. Publishing the documents on the basis of why the Government took the decision would be helpful to enable us to analyse it.

The Taoiseach covered the proceedings of the summits in his reply. There has been a sudden escalation in concerns about the eurozone economy. However, I do not get a sense that the concern was shared by European leaders at the recent Council meeting, especially in terms of building up confidence and securing vital investments. Can the Taoiseach outline whether at the Council meeting there was a renewed sense of concern about where the eurozone is? The President of the European Central Bank, Mr. Draghi, did not reduce interest rates for nothing. Clearly he is concerned about what is happening at eurozone level. The French economy went into negative territory in the last quarter. Europe keeps talking about stability, growth and employment but it is not happening throughout the eurozone, where there has been falling growth, investment and confidence.

I do not believe the Council meetings or the measures Europe has taken have been either large or urgent enough to deal with the situation.

Finally, I have tabled questions on the Taoiseach's meeting with Chancellor Merkel. As the Taoiseach has made significant play of contacting Chancellor Merkel about exiting from the troika programme and so on, for what precisely did he ask her? For what supports did the Taoiseach ask Chancellor Merkel? While the Taoiseach told Members the Chancellor supports what the Government was doing, he did not tell them this was because she also had rejected last September's proposal for a €10 billion contingency credit facility. The Financial Times is reporting that Ireland did not win Germany's support. I do not know whether it is the case that Germany rejected the position the Taoiseach outlined on 6 September. What was the Chancellor's stance or perspective on post-bailout funding and a precautionary credit line? The European media analysis essentially is that politics dictated the pace both here domestically and at a eurozone level in respect of the credit line. Moreover, it is that it suited a number of key countries, including Germany, that there would not be a precautionary credit line, that Germany sought certain conditions but that Ireland did not want particular conditions and wanted to go on about sovereignty and so on, even though the latter is a much-abused concept these days. Did Chancellor Merkel state to the Taoiseach that were Ireland to seek a precautionary credit line, she would require additional conditions? The Taoiseach should answer this question. That is enough for the present as although there is a range of other issues, there is quite enough there with which to be getting on.

Before the Taoiseach responds, as a long-serving Deputy and a former Minister, it is not in order to accuse Ministers of leaking documents to the media. I wish to put that on the record. The Taoiseach should proceed.

Deputy Martin has asked quite a lot of questions in his contribution. He is correct that €60 million is available under the direct recapitalisation from the European Stability Mechanism, ESM. It is well recognised that a €60 billion capacity for financial assistance is included in that mechanism. The single supervisory mechanism is a precondition for direct bank recapitalisation and that will not be established before the third quarter of 2014, after the balance sheet assessments are expected to conclude here in 2014. Subsequent to the establishment of that framework and allowing for time necessary for the completion of all those procedures, the ESM board of governors and the euro area finance ministers will add that new instrument to the list of available ESM financial assistance instruments. Consequently, one would expect the ESM would be in a position to offer direct bank recapitalisation financing. It will be some time before the single supervisory mechanism or direct bank recapitalisation is operational. It will be at least the second half of 2014 before that is expected to kick in.

I am aware of the speculation and comments made by people about direct recapitalisation for banks. As matters stand in this regard, that is, on the 29 June decision of the possibility of the ESM to deal with direct recapitalisation for banks, direct reference is still made to it. That situation stands and has been re-clarified in all the European Council meetings at which this issue was referred to or discussed, right through from June 2012, and that position still stands. If one considers the timescale of what is involved in this regard, until all these other pieces and instruments are put in place, it will be at least the second half of 2014 before this matter can be available for decision and discussions.

I did not get a chance to talk with the Minister, Deputy Howlin, who I believe is in Vilnius today. I will remind him of his comment in respect of releasing information about the freedom of information for the Deputy. At the European Council, there was a series of comments about youth unemployment and the general state of the economy. A presentation was given by the European Commission with particular focus on the digital economy and the need to remove digital barriers and borders because whereas physical borders have been removed, this is not the case for digital borders and there is a need to do this. In addition, there was a strong presentation from the Commission about its expectation that up to 900,000 jobs will be made available across Europe by 2015 in the whole information and communications technology, ICT, digital area with clear implications for all countries, including Ireland. Mr. Draghi gave a clear and strong presentation at the Council meeting about how he envisaged matters moving ahead. He referred to keeping interest rates low, to the remit of the European Central Bank, ECB, in controlling inflation and to the requirement for countries to continue to reform and become more competitive. Such competitiveness brings with it the jobs that follow on foot of investment and I believe this point was particularly strong. The elements of banking union have been dealt with in part through Ireland's Presidency and still continue to be the focus of discussions, leading on to the decision of 29 June 2012. I believe Deputy Martin referred to a banking union on a number of occasions and referred to the different elements thereof that must be dealt with here.

As to whether Chancellor Merkel or anyone else referred to conditions, Ireland never made an application for precautionary credit lines to anyone. What was done was to focus on what were the circumstances and options the Irish Government must consider in exiting the programme. The Minister for Finance went to Brussels, Frankfurt and Washington and spoke to other people. Consequently, it was not a case of the French President, the Italians, the Germans or anyone else stating this is what Ireland should do. They all made it perfectly clear that this was a decision for the Irish Government on behalf of the Irish people. It also was made clear that whatever decision Ireland would make would be supported. There genuinely was no pressure from anyone to the effect that Ireland must apply for a precautionary credit line or that a set of other conditions would apply, as that was not the nature of the discussion at all. As to what I discussed with Chancellor Merkel, obviously the technical support already offered is being followed through in the context of discussions between the Department of Finance here and officials from the German Chancellery in regard to KfW, the German AAA rated development bank. I hope that out of those discussions can come a structure or platform by which Ireland and its small and medium-sized enterprises can benefit from the level of low-interest moneys that would be available, given the current scale of the country's debt position, which I am glad to state will begin to fall in time.

In general, as Deputy Martin is aware, one speaks to different leaders around the table about their country and one's own country. The European Council never made any recommendation to Ireland, no leader approached to state that a particular course of action was what Ireland was obliged to do. I must state that by and large, they were highly appreciative of the progress made by Ireland as a country and its people, as reflected in the improved financial outlook for the country. As for the general Council itself, its mood was that if Europe keeps making decisions to move itself forward to be more competitive, the Union of 500 million people will have the opportunity to grow and develop. In addition, there were some references to the opportunities in the Single Market, the discussions about the European Union-US trade negotiations and so on.

There also was a discussion about the business of the allegations about telephones being listened to, encrypted telephones, mobile telephones and other communications facilities. A number of comments were made about how some information is necessary to have in regard to terrorist activities and the thwarting of occasions for bombings or general terrorist activities.

The Tánaiste had raised this with the American diplomatic services. My understanding, from the information made public, was that Dublin was not a listening post for the Americans. On the question of whether I asked the British Prime Minister if they were tuned into this country, I did not ask him because operational issues and exchange of information between the Garda Síochána and the PSNI about anti-terrorist activities are matters for the Garda Commissioner and the Chief Constable of the PSNI.

It would not have to do with the British-Irish Council.

I am referring to their capacity to have information to deal with potential bomb threats, for example. That information strategy is the responsibility of the Garda Commissioner and the Chief Constable. From that point of view, most countries are anxious to move on. Chancellor Merkel made it perfectly clear that we want to focus on the future and that there should not be a cessation of the discussions on the trade possibilities between Europe and the United States. This is the general view. France and Germany have had discussions with the United States, as has Spain, about what they regard as important for their countries.

The Minister for Finance, Deputy Noonan, went to the ECOFIN meeting and he explained to his colleagues the circumstances and the reasons for Ireland's decision. That decision has been generally well accepted but perhaps not by everyone. It is important in politics and in government to be clear and decisive when making decisions. Precautionary credit lines last for 12 months with an opportunity for a six-month extension and a further six-month extension. I listened to the Governor of the Central Bank, whom everyone respects, with regard to the decision to exit the bailout. I hope that further moneys are not required for any of the Irish banks. I have listened to the comments. The asset review tests are being carried out at the moment. Next autumn, all of the European banks will undergo the stress test, including banks in Ireland. The Government is of the view that the decision we made will result in a much improved position. Taking into account all those circumstances, this is why the Government made the decision in good time. It gives a very clear signal. Unlike Deputy McDonald's suggestion, there were no phone calls in the middle of the night to say one has to do this or that. Instead here is a Government which, along with its people, has made good progress and is entitled to make its own decision, in its own way, for our people and to be respected for that.

This group of questions asks the Taoiseach to report on his discussions with his fellow leaders of the European Union member states. Has the Taoiseach or his fellow EU leaders any appreciation of the increasingly harsh reality of life for huge swathes of ordinary working people in Europe, unemployed people and poor people, as a result of the continuing crisis of European capitalism and the austerity policy response by governments all over Europe, the so-called cure that is worsening the disease? At the recent EU summit a few weeks ago, as leaders met behind swathes of security and police to protect them from the people of Europe whom they are supposed to represent, did anyone in that elite bubble of EU leaders look outside that bubble and raise the devastating report of the International Red Cross on the economic and social effects of the crisis of austerity? Does it shock the Taoiseach in any way to hear the findings of this organisation, which are sober and conservative and which The Guardian newspaper sums up as Europe sinking into a protracted period of deepening poverty, mass unemployment, social exclusion, greater inequality and collective despair, as a result of austerity policies adopted in response to the debt and currency crisis and that while other continents successfully reduce poverty, Europe adds to it?

Does it shock the Taoiseach that, compared to 2009, millions more find themselves queueing for food, unable to buy medicine or access health care? Those without a job and many who still have work, are finding it difficult to sustain their families due to insufficient wages and sky-rocketing prices.

Does it shock the Taoiseach that the International Red Cross report concludes that five years ago it would have been unimaginable that so many millions of Europeans would be lining up for food in soup kitchens and receiving food parcels at home? Former middle-class citizens are living in trailers, tents, railway stations or in shelters for the homeless, and are hesitating to go to the International Red Cross. The report concludes that there are now more than 18 million people receiving EU-funded food aid, that 43 million people do not get enough to eat each day and 120 million people are at risk of poverty in the countries covered by EUROSTAT. Is this not truly shocking? Lest anyone believes the German workers are immune, the International Red Cross finds that in the past decade 5.5 million Germans have lost their middle class social status and have fallen into the ranks of low-income earners, while at the same time, half a million others made the grade as high-income earners. Is it not clear that the Taoiseach and his fellow European leaders have presided and continue to preside over a policy that is disastrous in its social and economic effects? Does the Taoiseach recognise this Europe? Does it ever feature in the meetings of the EU leaders? Does he understand that he is an integral part of the policy that is pushing millions to soup kitchens within Europe? This was the scene described in what we used to refer to as the Third World, but this is Europe. Is it not clear, therefore, that the financial market system, this dictatorship of the one per cent, the bondholders, the massive big banks, is a disaster for our people and that revolutionary changes in economic policy are needed to break this power of those who hold Europe in this vicious grip that is causing this horrific situation? Is it not clear that public ownership of this huge wealth of the financial institutions in democratic control, is necessary? I ask the Taoiseach if he is ashamed of the Europe he and his fellow leaders have created.

Political decisions have to be made to change that very situation. Does the Deputy think anyone involved in politics, of whatever party, is happy with the situation where 26 million people are out of work in the European Union? Does he think anyone in politics is happy that 6 million young people under the age of 25 are unemployed? The Deputy seems to think this can be suddenly changed by one of his financial instruments.

It requires fiscal discipline, putting people's houses in order and cutting out the waste.

We are part of a global pattern in this respect. There are 1 billion people on this planet who are obese. There are 1 billion people on this planet who are starving. There are 4.5 billion people in the middle sector and, for the first time in human history, dietary complications have passed out medical complications. There is an attitude and a culture problem in that respect as much as anything else. That is why this country has come through difficult periods and has had to make difficult decisions in recent years. That is why other countries within the European Union look at us and say we are making real progress. That is why Ireland's Presidency was able to get across the line the budget for the European Union of €960 billion. That is why we were able to hold on, because of our negotiations, to 97% of the moneys allocated under the Common Agricultural Policy. That is why the implication is we can see the future by making political decisions. In the past 12 months, 26,000 extra people in this country gained full-time permanent employment in the agrisector, and others in Europe see that. If we do not produce the food, somebody else in bigger countries with different scales, fewer standards and less competence will produce it and that will have complications, about which the Deputy has often spoken in the House, in terms of rain patterns, landslides and all the other implications of climate change.

Deputy Higgins knows he will not deal with the problem of 26 million people being unemployed unless he makes decisions to have economies that are growing where goods can be manufactured and sold and where food can be produced for people's livelihoods. We have the advantage, if we run our Union properly, of being one of the greatest trading blocs on the planet-----

Austerity is killing the people.

-----and the political decision, after many years, to enter into negotiations with the United States holds the potential to create several million jobs.

Deputy Higgins does not believe that. He has his own philosophy to put the entire world at work in the next 12 months, but I regret to tell him that does not work either.

As a small country and as a reflection of some of the things that happen, I am glad to see an improving situation in this country where 58,000 jobs have been created in the past 12 months.

And 70,000 lost.

They are real people doing real jobs. They are not languishing in the rut of disillusionment or on the unemployed lists-----

They are in Australia, Canada and Britain.

-----and it is political decisions that change that. I met a young man in Waterford the other day who went to Australia, worked for 14 months doing two and three jobs when he could, came back with €100,000 and set up his own business, and he was very happy to do so. It was his choice to earn money where he could, do two or three jobs where he could get them and come back with that intention.

We have the fifth highest direct payments to children in the European Union. Other countries have problems of a different scale, including the Nordic and the southern Mediterranean countries. Spain has a massive problem in terms of young people being unemployed, as does Greece. We have been affected by this economic catastrophe also. Clearly, the situation will not rectify itself. It will only be dealt with by the people making political decisions in the interests of our country.

Coming from a western county facing the Atlantic, Deputy Higgins knows that time after time, in adversity after adversity, when the Irish people identify a problem, they roll up their sleeves and always achieve a result, and we will continue to do this for 2014.

Bled dry for bondholders.

I hope that many of the young people who feel they had to leave by choice will have the opportunity to come back in the next few years. We hope that might be the case but Europe, dealing with 500 million people, must make difficult decisions. Am I happy with 26 million out of work? No. Am I happy with 6 million young people unemployed? No. Am I going to do something about it?

Soup kitchens.

Yes - make political decisions that will change the opportunities and the career chances they have. That is what good politics is about. That is what the people judge us on. Did we do the job or did we not? Are we worthy of being given a continued mandate and trust? Governments come and Governments go but if Deputy Higgins ever has a chance, when he has the mandate he should use it in the interests of the country and the people.

The reason direct payments to children are so high in relative terms in this State is that the provision of basic public services is so appallingly bad.

I mentioned earlier the issue of reclaiming our sovereignty, and the Taoiseach reflected that language back to me. I was simply reminding the Taoiseach that that was the headline claim he made when he announced the exit from the bailout programme. It is necessary to point out that far from a restoration of full sovereignty, what people are facing into next autumn is yet another austerity cutback budget to the tune of €2 billion.

The Taoiseach made some references in his responses to the issue of bank recapitalisation. He recalled again the statement of June last year. I believe at that time we had the reassurance that we were special, and that our banks were a special case. The Taoiseach has indicated today that he does not envisage the ESM being functional until the second half of 2014. Given that, can he tell us when he envisages Ireland having a decision? When might we expect to see our special status come to fruition and some level of retrospective recapitalisation of our financial institutions?

On the issue of youth unemployment and the youth guarantee, which we could discuss at some length if we had the time, I was disturbed to hear the Taoiseach state, quite deliberately, that the young people who have left by choice might have the opportunity to come back. In my certain knowledge, the majority of people have not left by choice.

Deputy Adams had tabled a question regarding the Taoiseach's dialogue with Prime Minister Cameron. Can the Taoiseach tell the House the engagement he has had with Prime Minister Cameron specifically on the issue of the Haass process and his consideration of flags, emblems, parades and the past?

The Deputy is wrong when she says the reason we have the fifth highest direct payments to children is that we have a poor quality of public services.

She is wrong because there has been a long tradition in this country of direct cash payments to families. That is the reason we have that process continuing over very many years. I do not agree with the Deputy when she runs down the very many fine people who work in the public services-----

I have not run down anyone.

-----and in our front-line services who give of their best and work long hours with a great degree of commitment and integrity.

Do not try to dodge that question. That is desperate.

If the Deputy believes she should run them down, that is her business.

When I say the exit from the bailout programme is important in the sense of reclaiming our sovereignty, I mean that it gives the Government, on behalf of the people, greater flexibility in the things we do. We have signed up to the two pack and the six pack as part of the European process, as other countries have done. That requires them to do the same as we do, namely, run our affairs efficiently and effectively, but it also gives us the opportunity and the flexibility to do far more as a Government in the decisions we make. That is the element of sovereignty that is important.

The Deputy asked when Ireland will see a decision in respect of special status.

I point out to him that one has to go through the process of the ESM and that the banking union and the instruments involved in that must also be addressed. That will take us to the third quarter of 2014. These special circumstances that apply in Ireland have been referred to publicly by a number of European leaders at different times. As I said, the decision of 29 June, referring specifically to the well-performing programme of Ireland, requires those special circumstances to be taken into account. That is what we have to do, prepare for and negotiate and discuss with our European colleagues. The Minister for Finance will lead those discussions.

Let me be clear on this. Some people leave the country by choice for experience, for work, for training, for adventure, to see the world or whatever. Others leave because they feel they have no hope here. They are the ones for whom I feel very sorry because they feel the country has let them down. I would like to think we could provide a better opportunity for those people, in particular.

I spoke to a young electrician in Limerick some time ago. He had been in Canada for four and a half years and came home. I asked him what he heard about Ireland while he was away. He said that if one listened to the international news, one would think one should never go back home because it was a wall of disillusionment. He said he was a trained electrician and had four job offers in the first week he came back here. We need to reflect on the things we do well-----

The Taoiseach should write a novel.

-----and the improving position.

Some people might not want to recognise that but there are young people abroad who are gaining experience and who will have the opportunity to come back. For those who left because they were disillusioned with our country and with politics in our country or they felt let down-----

They had to leave because they had no work.

-----I hope today's CSO figures of 58,000 jobs created last year are an indication of us heading in the right direction. I read headlines in the newspapers suggesting that all of those putting in the water meters are from other countries. I think ten of the 400 came back from Sasana to be employed here but people put different interpretations on these things. I know about emigration and I have a lot of contacts with emigrants. I would like to think that when the economy improves and there are brighter days ahead that some of those who have left will want to come back.

I welcome the fact the Taoiseach has such contact with so many people.

I wish he had much more contact with many medical card holders who have lost their medical cards because he would then have a far greater grasp of that reality but that is a separate matter for a different forum. However, the failure of the Government to grasp the reality of people losing their discretionary medical cards on a continual basis is something I cannot comprehend.

The Taoiseach said it is expected that the ESM will be operation in the third quarter of 2014 because at that stage, the single supervisory mechanism will be in place. All of the commentary so far has been to the effect that the ESM will be the recapitalisation instrument of last resort and that sovereigns will be ahead, and banks themselves initially. That is before we get to talk about retrospective recapitalisation.

I asked the Taoiseach earlier whether the issue of retrospective recapitalisation was dead or alive. What has he been hearing in terms of his negotiations with other EU Heads of State? Has he negotiated or discussed this issue recently? Ireland is owed one by the European Union. The Taoiseach has said that on the record. President Schulz, the President of the European Parliament, came here and said that Ireland took one for Europe. We were not allowed to burn bondholders or to allow any bank to fail on the basis that it would spread contagion across the eurozone. That was the position of the last Government and it is that of this one because the last time the banks were being recapitalised and the Minister for Finance brought the proposals before this House, his Government had agreed to burn the Anglo Irish Bank bondholders on that occasion. However, we learned from The Price of Power, the book by Pat Leahy, that the Minister got a telephone call from President Trichet at the time who basically said that a bomb would go off not in Brussels but in Dublin if he proceeded with burning bondholders so adamant was he against that position.

That is the reason Ireland is due a return from Europe in respect of the debt it has undertaken as a result of the banks, the collapse of our banks and banks across Europe following that. Putting politics to one side, there is a genuine sense that the key players in Germany and across Europe are moving steadily away from the prospect of separating the sovereign from the banks, in particular the ESM definitively being in a position to recapitalise banks, and that is not even in the context of retrospection. Will the Taoiseach comment that he is more than confident - that he is certain - the ESM will be there to recapitalise banks into the future and that retrospective recapitalisation for Ireland is still genuinely on the cards?

I call Deputy Mathews to be followed by Deputy Higgins. We have 43 seconds left.

Some 43 seconds is a bit of a tall order.

I am only dealing with Deputies who have questions. I have called the Deputy, so he should ask a quick supplementary question.

I know the Taoiseach and the Government are doing their best but I ask the Taoiseach solemnly and sincerely to stop and look at where it is leading because it is not the right path.

Thank you, Deputy.

A Cheann Comhairle, please-----

You are finished. Deputy Higgins has to come in.

I ask the Taoiseach to please read Joseph Stiglitz's book, The Price of Inequality, because he needs to get a new view of what has happened in America, which he holds up as a paragon of business, finance and economics, which it is not at present. It is an unfair and inequitable society.

At the recent summit or in any of the Taoiseach's informal talks with his fellow EU leaders, did the plight of Edward Snowden feature? Was it discussed at the meetings or was there any discussion on offering him security and a safe haven within any country of the European Union? Does the Taoiseach accept that he struck a big blow for human rights by exposing the type of massive intrusion by the big states of America and Britain into people's lives?

Does the Taoiseach accept that, while British intelligence would probably not be too interested in the latest results of the junior match between Kiltimagh and Cong via monitoring his telephone, there are huge issues at stake here, in particular that the man who has brought this out at great risk to himself should be vindicated?

Deputy Martin asked a couple of questions about the ESM. I am certain about a few things. I am certain of the decision of the European Council of 29 June which stated that the ESM would have the possibility of direct recapitalisation. I am also certain that cannot apply until the various elements of banking union are in place. They will not be in place until at least the second half of 2014 - before any such application can be dealt with.

There is some talk about elements of this from the European point of view. There was the same speculation about the reduction in the interest rate, the extension of the loan maturation and the whole business of the promissory notes. It was agreed in June that potential retrospective and retroactive application of the instrument of the ESM will be decided on a case-by-case basis and by mutual agreement and possible cases will be discussed and assessed on their own merits once the ESM enters into force. Nothing that has happened has changed that.

I made the point on a number of occasions that it is very important that when the European Council makes decisions that it stands by them, so I am certain of that. Each time we have had a European Council meeting this has been referred to in the same language of that possibility of recapitalisation. As the Deputy knows, Ireland was the first to have to deal with this, without any tools or instrument available to it.

If he had been around at home-----

Mr. Schäuble said differently on our budget day.

-----he might have had a big influence on the way this might have gone. He is a man who displays quite a deal of sanity.

Mr. Schäuble said differently on our budget day.

Deputy Mathews, please.

Deputy Mathews referred to the Chair's comment about 43 seconds. I remind him of what happened when the All Blacks had 43 seconds left.

Is the Taoiseach serious?

They showed, much to the detriment of our own people here, that if one does not panic, knows one's own limitations and believes in oneself, one can get a result.

That is bizarre.

Is the Taoiseach going to read the book?

I did not know the Taoiseach could be so absurd.

I take the Deputy's comment about Professor Stiglitz, who is a renowned economist and other economists. We have them by the hundred. We have them by the thousand.

The Taoiseach should read the book.

They are all prepared to give of their theories, but very few of them ever have to make decisions. Government is about making decisions.

I will buy the Taoiseach a copy.

Santy will bring it.

As Gaeilge nó as Béarla?

I am sure I can get it online.

It will be helpful.

Very few of them, Deputy Mathews-----

I am not being facetious.

They are great people-----

I am being solemnly sincere.

-----to give advice and advance theories.

They are not - they are evidence-based.

They do not have to go to public meetings where their name is on a chair at the top and they have to answer questions in front of 1,000 people.

They use evidence.

The decisions made on these benches have an impact on our people.

You walked away, Peter.

I would be the first to take good advice from a renowned economist like Professor Stiglitz-----

It is not my advice; it is evidence.

-----or the Deputy himself.

The Taoiseach should look at the evidence.

I receive a barrage of it occasionally. I know the Deputy has long experience in banking circles.

I ask the Taoiseach to look at the evidence.

You walked away, Peter.

Deputy Higgins spoke about a match involving Kiltimagh. It could have involved Annascaul, Finuge, An Ghaeltacht or West Kerry.

It could have been Castlebar Mitchels.

To my knowledge, there was not a discussion about Edward Snowden at the European Council. I may have been engaged in talking to some leaders at the time.

Was it snowing out?

I cannot recall that there was any discussion about the gentleman concerned at the last European Council meeting.

Will the EU offer him sanctuary?

I will have that book for the Taoiseach first thing tomorrow.

The Deputy can get it for the Taoiseach for Christmas.

No, I will get it for him tomorrow. Christmas would be too late.

The Deputy walked away.

No, I was thrown out.

Written Answers follow Adjournment.
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