Dáil Éireann díospóireacht -
Tuesday, 15 Nov 2011

Vol. 746 No. 3

Leaders’ Questions

Deputy Micheál Martin

I welcome the fact that after eight months and five summits the Taoiseach will finally hold a bilateral summit tomorrow with a leader of a eurozone country. As we have been pressing him on since last June, there is an urgent need for the Taoiseach and the Tánaiste to do more than just talk about diplomatic initiatives. Now that he is finally meeting Chancellor Merkel the big question remains as to what is his policy in this area. What is the Government demanding in terms of issues specific to Ireland and measures to tackle the eurozone crisis?

I wrote to the Taoiseach last week calling for a cross-party consensus which would set out clearly Ireland's position. He rejected that and refused even to consider holding a meeting on it. Last month's euro deal has already fallen apart. Existing European policies have not worked and cannot work and if the Taoiseach continues to sign off on statements claiming that the euro crisis is about individual countries being reckless Ireland will continue to quietly go along with the end of the euro and the economic disaster which may follow.

It is very clear what needs to be done and the most important part of that is that the European Central Bank must start acting as the central bank for all member states and not just one. Will the Taoiseach do tomorrow what he has so far refused to do and state that Ireland, clearly and without qualification, believes that the European Central Bank must stop the policies that have driven three countries out of the bond markets? Will he demand that Chancellor Merkel and others start representing the views of all of the member states of the eurozone because if they continue as they have been going in recent months they will have done more damage than any euro sceptic could do to the European Union?

The Taoiseach

The matter Deputy Martin raises is central to the citizens of the European Union and central to the citizens of the eurozone. I have attended eight European meetings, including two meetings of the European People's Party, and I recently met with EU Commissioner Barroso on 13 October. The Minister for Finance, Deputy Noonan, has attended ten eurogroup-ECOFIN meetings and at least ten European People's Party meetings of Ministers for Finance. The request I made to meet Chancellor Merkel was issued some time ago. For the information of Deputy Martin, the French President offered a date for a meeting which I cannot take up because I have business here with the British-Irish Council. I have met Chancellor Merkel at all of these meetings previously. The meeting which takes place tomorrow is an opportunity to have a discussion with her in her capacity as German Chancellor about perspectives as to what lies ahead for the eurozone and European Union.

Deputy Martin wrote to me last week and offered a cross-party consensus which would give me a mandate for attending European Council meetings. Clearly, one will not get cross-party consensus on a specific mandate because Sinn Féin has been completely opposed to the concept of European union since we joined the European Economic Community. I notice today, however, that Deputy Doherty is in favour of supporting the euro. There is, therefore, no point in pursuing something that is not realistic or cannot happen. In any event, as Deputy Martin will be well aware, one sits at the European Council meeting of leaders on one's own and if things change rapidly, one could be locked into a specific mandate that is completely off-the-wall or irrelevant in terms of what can happen at such meetings. Things are moving at a frenetic pace. Two technocratic governments have been established, with Prime Minister Monti putting together a government in Italy and Prime Minister Papademos focusing on the Greek situation.

In so far as the European Central Bank is concerned, Deputy Martin will appreciate that the ECB comprises the governors of 17 different central banks. The German Government has a very strong view which is in direct conflict with the proposition made by the Deputy. I have stated previously, as has the Minister for Finance on numerous occasions, that if one wants unlimited financial firepower to deal with contagion across countries, the ECB is obviously the ultimate authority in this respect. The decision of the Heads of Government was in respect of the EFSF and two vehicles for leveraging up that particular money. It is clear there are some complex, technical difficulties associated with this.

In so far as tomorrow's visit is concerned, it is an opportunity to state that this country respects the right of other countries to put forward views about governance and fiscal discipline in respect of the way in which things are run. This country was always absolutely on line in respect of the Stability and Growth Pact and for what its worth we have begun a journey that is headed in the right direction. However, we still need continued support and understanding from our European colleagues.

What I would like to see now in the case of Italy and Greece is a focus on the austerity programmes that will have to be put through in both countries to bring a sense of cohesion to the market situation. I am quite prepared to discuss with Chancellor Merkel her views on Europe which she articulated at the CDU conference yesterday and over the past week. What is important for us is that we continue on the path of meeting the conditions of the bailout and focus on what Europe needs to do to continue to achieve growth in the eurozone and European Union in order that we can come out of this at the earliest possible time.

Deputy Micheál Martin

We have a cross-party mandate on corporation tax which the Taoiseach agreed with all parties in the House before a European summit meeting. I do not accept his view that we cannot work to try to develop a cross-party consensus on matters pertaining to Europe and the national position. It is incredible, in the teeth of the worst eurozone crisis ever, that he appears to have indicated he cannot take up an offer of a meeting with President Sarkozy.

The Minister of State, Deputy Creighton, stated on Sunday that Germany would have to allow the European Central Bank to expand bond buying. She went further and stated Germany will change its position because it will have to do so. The Minister of State with responsibility for Europe is talking very tough in the Irish media.

An Ceann Comhairle

Will the Deputy ask a question, please?

Deputy Micheál Martin

Will the Taoiseach follow up on her comments?

Another summit next week is due to agree a framework for reforms of the European Union, yet the Taoiseach has not yet made a single substantive point on what Ireland's position will be on this matter. Some weeks ago in the House he stated he did not have any idea what was being talked about and he was only talking about limited treaty change. With his sixth summit since taking office imminent, will the Taoiseach finally propose an item for the agenda and circulate any proposals? Again, I ask him to take up my offer to hold cross-party talks in order that we can arrive at an agreed position that would strengthen Ireland's national position. Existing European Central Bank policies are not working. They have failed abysmally and it is time this country started to say something about it because we and many other member states have just as large a stake in this issue as Germany, France and the other big players.

The Taoiseach

We made a number of dates available to the French authorities. Obviously, all leaders have their own schedule of dates. As far as I know, I have undertaken to meet the British-Irish Council on the date in question and cannot break that undertaking. We will rearrange a meeting for another appropriate date. The Deputy should not find this incredible as it happens on a daily basis.

Deputy Micheál Martin

Eight months ago, the Taoiseach stated he would undertake the biggest diplomatic initiative of all time.

The Taoiseach

As the Deputy well knows, all leaders are entitled to have their own schedules. We do not sit around these tables as leaders of big and small countries but as equals.

In respect of the drafting of the agenda, I notice Deputy Martin does not ask what is the agenda from Slovakia, Estonia or Britain.

Deputy Timmy Dooley

This is the Irish Parliament.

The Taoiseach

Deputy Martin has not sat around the table in respect of the drafting of the agenda.

Deputy Micheál Martin

I have actually.

The Taoiseach

He has not done so as a leader and that is what is missing. In December, President Van Rompuy will provide a report, a paper, setting out a basis of what he considers to be possible in the context of treaty change. This will be followed by a roadmap which will probably be delivered in March 2012. It may well be that other leaders will want to expedite the matter. I can state, from other leaders who sit around the table, that if one decides to have major treaty change, one opens up all of these other areas for discussion with the European Parliament, Intergovernmental Conferences and all of that. I look forward to a discussion with Chancellor Merkel tomorrow on governance issues, her views on the extent of treaty change, whether by protocol which may or may not require a referendum——

Deputy Micheál Martin

Will the Taoiseach set out his views at the meeting?

The Taoiseach

My views are on record. I do not believe radical treaty change is needed. The vast majority of what one needs to do in terms of governance and fiscal discipline is already in the agreements and flexibilities that have been approved. While I intend to make this point clearly, I also have very strong views about the Single Market and the potential for further exports and business within the European Union. As Deputy Martin knows, big business in the Far East and United States does not talk to the extent it should about the potential of Europe because Europe has strangled itself to a great extent. We need to free up this matter. I recognise the Deputy's views on the issue are always important. At least he and I can agree on the importance of the eurozone, European Union and euro, unlike Sinn Féin which takes a radically different view.

Deputy Gerry Adams

I was about to ask the Taoiseach about Slovakia or Estonia but I will stick to trying to get an answer about this State.

Deputy Michael Noonan

What about a question on Libya?

Deputy Leo Varadkar

Or Colombia.

Deputy Gerry Adams

On 4 November, the Taoiseach indicated he would consider introducing legislation to compel the banks to pass on to customers the ECB interest rate reduction. The avalanche of press statements from Labour Party and Fine Gael backbench Deputies applauding his commitment shows that they are aware of the distress mortgage holders are under. The Taoiseach called on the banks to do the right thing. Despite Bank of Ireland and Ulster Bank continuing to defy the Government and National Irish Bank deciding to increase its rates, there is no sign of the promised legislation. Billions of euro of taxpayers' money have been ploughed into the banks by the Government and bankers and bondholders have been bailed out. Distressed mortgage holders, on the other hand, have not received a bailout. Will the Taoiseach inform the House and the tens of thousands of people who are struggling with mortgage payments what he intends to do about this issue? Will he act in the interests of citizens by introducing the legislation about which he gave a commitment and, if not, will he be straight and indicate he will not introduce such legislation?

The Taoiseach

Unlike the Deputy's views over the years, when he was asked whether he condemned this or that, my answers are very straight. I said in here last week that if the regulator sought extra regulatory powers from the Government, the Government would respond to him. The regulator has written to me and has said at this time, he does not seek powers to regulate interest rates. The Deputy asks me what are we going to do about it. The fact is that the Government called in representatives of the three banks for a serious discussion, in advance of the interest rate reduction issue, about their strategy for growth and lending, their position on access to finance for small and medium enterprises, the capacity to meet targets set out by the two pillar banks of €3 billion each this year, and a number of issues that were of interest to the Government and to the banks. Following that, we discussed the question of the interest rate reduction being passed on.

I welcome the fact that Allied Irish Banks have passed on the reduction in interest rates. I am very disappointed that others have not done so. As has been pointed out clearly by the Minister for Finance, the ECB reduced interest rates to stimulate economic activity, to provide an opportunity for further investment, to help people who are in difficulty and not to have banks make a capital increase from it. This is ECB policy and I expected that banks would follow ECB policy.

Deputy Gerry Adams

I would never expect the banks to do anything, given their involvement in the economic crisis we are trying to escape. I do not think the Taoiseach and his colleagues need the regulator to tell them what to do. They can see it in every constituency across this State.

The Taoiseach spoke about straight answers. I would like to remind him of some of the Government's public interest directors on the boards of banks. Former Labour Party leader Dick Spring gets a basic salary of €27,355——

An Ceann Comhairle

We are on supplementary questions now.

Deputy Gerry Adams

——in addition to a ministerial pension. This is a supplementary question.

An Ceann Comhairle

It is not really.

Deputy Gerry Adams

A former leader of the Taoiseach's own party is chairman of the bank formerly known as Anglo Irish Bank, and he gets a cool €150,000 on top of his ministerial pension. Mr. Joe Walsh, a former Fianna Fáil Minister, is in the Bank of Ireland——

An Ceann Comhairle

This is Question Time. We do not read from documents at this stage.

Deputy Gerry Adams

——as is Tom Considine, a former Secretary General of the Department of Finance, and they have earned €290,000 in fees between them since they took up those jobs.

Deputy Tom Hayes

Sinn Féin got more from the Northern Bank.

Deputy Gerry Adams

Has the Taoiseach considered removing them and replacing them with directors who actually operate in the public interest? What say do citizens have on these issues if the banks are going to do whatever they want, regardless of the pleas of the Government?

The Taoiseach

The former Labour Party leader, Dick Spring, is a public interest director on the board of AIB and that bank has passed on the interest rate reduction.

Deputy Pat Rabbitte

Deputy Adams still managed to give him a mention.

Deputy Gerry Adams

Is he a former Labour Party Minister, like Deputy Penrose?

The Taoiseach

The former leader of the Fine Gael Party, Alan Dukes, is involved with the former Anglo Irish Bank, which is no longer a bank. The former Minister for Agriculture, Fisheries and Food, Joe Walsh, a former member of the Fianna Fáil Party and an esteemed man in his own right, is a public interest director on the board of the Bank of Ireland, which did not pass on the interest rate reduction.

A Deputy

That's Joe's fault.

The Taoiseach

It is not Joe's fault. The fact is that the Government owns 15% of the Bank of Ireland. I am very disappointed that the Bank of Ireland has not passed on this interest rate reduction in accordance with ECB policy. The regulator's job is to look at every bank to see that there is fair play across the field. I respect that effort from the regulator. His letter states that "the power to exercise close regulatory control over retail interest rates is not, however, being sought by the Central Bank at this time". However, he also states the following:

The Central Bank has two concerns. First, the standard variable rate contract has operated for decades, during which the reasonable assumption has been established that it would generally attract the cost of funds to the bank. The exercise of the currently heightened market power by some banks in increasing rates for existing SVR borrowers would be an abuse contrary to public policy. Second, from the point of view of prudential and consumer regulation, it is possible that the deleterious effect on the mortgage arrears situation, arising from large increases in the SVR, could result in a net worsening of the banks' prospective profitability, while at the same time adding to the financial difficulty of hard-pressed home owners.

Deputy Gerry Adams

A Cheann Comhairle, the Taoiseach is reading from a document.

The Taoiseach

Deputy Adams is aware that the Government has a number of measures in place already. The Keane report is being analysed. The House is still debating——

Deputy Pearse Doherty

There are no measures in place already.

The Taoiseach

There are some measures in place already.

An Ceann Comhairle

Hold on a minute, please Deputy.

Deputy Pearse Doherty

There are commitments in the programme for Government, but——

The Taoiseach

The Keane report has brought forward ten measures. The House is debating that report this week. An implementation group of the Department of Finance is looking at other proposals that are coming before the House. I expect the Minister for Finance to bring back a report on the best proposition some time before Christmas.

Deputy Pearse Doherty

People expect the Government to act on their behalf. They did not elect Matthew Elderfield.

The Taoiseach

I heard the Deputy supporting the euro today.

(Interruptions).

Deputy Ray Butler

Will Deputy Adams comment on the closure of a national school in the North?

The Taoiseach

Deputies are entitled to speak about the Bill mentioned by Deputy Adams. We have 15 speakers in this party yet to speak.

Deputy Ray Butler

What does he think of the closure of a national school in Dunmurry?

(Interruptions).

An Ceann Comhairle

Deputy Butler, please. I would like to state for the record that the Taoiseach or a Minister is entitled to read in order to reply to a point made by a Member. I call on Deputy Higgins. I want a bit of order for the Deputy. We are not short of so-called comedians in here.

Deputy Joe Higgins

Did the Cabinet decide today to close down army barracks in Clonmel, Mullingar, Castlebar and Cavan? What is the rationale for this proposal when there are no savings to the State? For the 600 soldiers and their families, most of whom are workers in uniform as ordinary rank and file members, this will be an enormous ordeal, forcing them to uproot and move to different towns and cities. One can imagine the hardship for younger soldiers with families and mortgages in negative equity. Children will be uprooted from schools and from their extended families and communities.

The economic dislocation to the towns concerned, particularly Mullingar, Clonmel and Cavan with around 200 soldiers in each barracks, will be considerable. In Clonmel, PDFORRA estimate a loss of €9 million to €10 million per annum to the town's economy. That is a loss to shops, restaurants, small enterprises and trades and is equivalent to a small size factory or workplace closing down. There are no economic benefits to the State. No savings will be made, because moving the soldiers and their families will mean refurbishment and other extensive costs. What is the point when this is hitting the same domestic economy as the Government's general austerity policy?

There are local campaigns in these towns involving soldiers, their families and friends and the community——

An Ceann Comhairle

Can we have a question?

Deputy Joe Higgins

In Clonmel, Deputy Healy and the Tipperary workers' group and the United Left Alliance have correctly examined the situation and are absolutely opposed to this. Perhaps the Taoiseach could take a lesson from history in the case of Clonmel. Even Cromwell was persuaded not to loose destruction on that particular town, following the opposition of Aodh Dubh Ó Néill, his soldiers and the citizens.

Has the Taoiseach lost a soldier of some rank over this in Mullingar today? Has the Minister of State in the Department of the Environment, Heritage and Local Government, Deputy Penrose, tendered his resignation over the closure of these barracks and the dislocation this will cause to families? Has the Taoiseach accepted it?

Deputy Finian McGrath

Man overboard.

Deputy Joe Higgins

Will the Taoiseach reconsider that decision now?

The Taoiseach

I can confirm to the Deputy that the Government has made a decision arising from a report prepared by the Chief of Staff for the Minister for Defence in respect of the closure of the four barracks he mentioned. This is to do with the consolidation of the Defence Forces into fewer locations arising from the evacuation of these four barracks.

Deputy Barry Cowen

Evacuation.

The Taoiseach

In addition to the 515 military personnel, a total of 25 civilian personnel will be transferred to the new locations. I must point out to the Deputy that this is not the same as the job losses at Aviva or TalkTalk——

Deputy Timmy Dooley

Tell that to Deputy O'Dea.

The Taoiseach

——where there is a resultant move to support from the Department of Social Protection. No job is being lost here——

Deputy Seamus Healy

Nonsense.

Deputy Michael Healy-Rae

Jobs will be lost.

The Taoiseach

——and there is a transfer of Defence Forces personnel. We are proud of the job they do for this country both nationally and internationally. The fact is that the location of personnel in a large number of places has been a major difficulty in the provision of essential training and in terms of safeguarding the barracks concerned and the additional costs that are imposed thereby. If the Deputy considers the areas in which barracks have closed over the last ten or 15 years, he will see that the economic consequence has not been as he said. Personnel have not moved from areas in which barracks have been closed to receiving barracks and the local economy is still the beneficiary of the wages and salaries of Defence Forces personnel in the area.

In response to the Deputy's last question, I can confirm that I have received, with regret, a letter of resignation from the Minister of State with responsibility for housing, Deputy Penrose.

Deputy Joe Higgins

I am afraid it is similar to the closure of workplaces such as TalkTalk or Aviva, although perhaps not on the same scale. In many cases, families will be obliged to move, as otherwise the personnel involved will be forced to commute for hours every day.

Deputy Shane McEntee

It is not bicycles they are going on.

Deputy Billy Kelleher

What about the stags?

Deputy Timmy Dooley

It will not be on a deer either.

An Ceann Comhairle

Please allow the Deputy to make his point. He has only one minute.

Deputy Finian McGrath

Tell that to Deputy Penrose.

Deputy Joe Higgins

I wonder would the Deputy——

An Ceann Comhairle

Do not mind the interruptions, Deputy. Just put your question. Thank you.

Deputy Richard Boyd Barrett

They are the ones who are interrupting.

An Ceann Comhairle

That is what I said. I said, "Do not mind the interruptions".

Deputy Joe Higgins

It is quite callous for members of Fine Gael to dismiss the concerns of soldiers and their families in this way.

An Ceann Comhairle

Deputy, you are using up your time.

Deputy Joe Higgins

To be forced to change their way of life and commute for three hours a day, which would be the case for some of the soldiers, is an intolerable change in conditions.

An Ceann Comhairle

Could we have the Deputy's supplementary question?

Deputy Seamus Healy

An hour and a half each way.

Deputy Dara Calleary

Good for the environment.

Deputy Joe Higgins

How can the Taoiseach say that jobs will not be lost when people have to move, and those who provide services in the local economy which are dependent on these people will obviously suffer? It is a major dislocation. What is the rationale? The Taoiseach cannot even argue that there are economic benefits to the closure. Is the resignation of Deputy Penrose giving Fine Gael and the Labour Party pause for thought? Deputy Penrose has been here since my own days in the Labour Party, which is almost longer ago than I can remember. Obviously he has a significant history in the party, and his resignation must be taken seriously. What position does this put the dozens of new Labour Party Deputies in?

Deputy Timmy Dooley

They are in interview mode, I would say.

Deputy Finian McGrath

Looking for a promotion.

Deputy Joe Higgins

Are they prepared to sit here and see soldiers and towns and local economies destroyed in this way? I am asking the Government to reconsider. What is the rationale for the decision when it cannot even use an economic argument?

The Taoiseach

I disagree fundamentally with the Deputy. As I said, Óglaigh na hÉireann, the Irish Army, has been a proud defender of our country both at home and abroad. The savings involved will be of the order of €5 million, with efficiencies of about €1.3 million per year.

Deputy Joe Higgins

And refurbishment.

The Taoiseach

It also means that personnel will be released for operational duties——

Deputy Seamus Healy

Security.

The Taoiseach

——which are of fundamental importance to the Army.

I know Deputy Higgins is speaking for Deputy Healy because he does not allow him to speak as part of that group at all. The proceeds of the sale of the barracks——

Deputy Joe Higgins

That is not true.

Deputy Seamus Healy

What about security?

The Taoiseach

It is like the captain and the private over there. The Deputy does not even allow him to speak in his party, or whatever they call it.

The proceeds of the sale of the barracks will be used to fund the upgrading of Defence Forces equipment and infrastructure. For the information of the Deputy, since 1998, ten barracks were closed under two barrack consolidation programmes.

Deputy Dara Calleary

Closed by Fine Gael.

The Taoiseach

A total of €85 million was realised from the disposal of six of those barracks. The proceeds of the sale of these four barracks will go towards investment in infrastructure for the Army.

As the Deputy knows, the Government is anxious to maintain the strength of the Army at operational level. I can confirm to the Deputy that a travel expense allowance is payable for nine months to personnel who move to a new barracks, and if they decide to relocate after that there is a relocation expense.

Deputy Michael Healy-Rae

Who said they do not want to relocate?

Deputy Colm Keaveney

If they want to.

The Taoiseach

The vast majority do not do that. For those who do not avail of the travel allowance, the Army supplies transport for its personnel.

Deputy Micheál Martin

So it is cost-neutral?

The Taoiseach

This is part of a whole series of reforms that the Government must undertake in order to rectify the fact that we are spending €18 billion more than we are taking in.

Deputy Joe Higgins

It is not saving anything.

The Taoiseach

There are some difficult decisions to be taken in the time ahead. The Deputy will decry all of them, but believe me, these decisions are made in the best interests of our country.

Deputy Joe Higgins

It is not saving anything. The Taoiseach just said it.

The Taoiseach

I commend the Minister of State, Deputy Penrose, on his activities as Minister of State with responsibility for housing, including making constructive propositions and taking difficult decisions. I can understand any Deputy's making a decision such as he made. The Cabinet must make decisions; that is our job. The mandate we were given is to sort out the problems of this country and that is what we intend to do.

Deputy Timmy Dooley

It makes no sense. We are swapping one barracks for another.