Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Wednesday, 29 May 2013

Vol. 805 No. 2

European Council: Statements

I am pleased to brief the House on the outcome of this month's meeting of the European Council which took place in Brussels last Wednesday, 22 May. Last week's summit meeting had an agenda which was focused on the two important thematic issues of energy and taxation. I welcome the initiative taken by President Van Rompuy to ensure that we take time to have discussions on issues of such strategic importance. Both of the issues discussed last week are highly relevant to continuing efforts to improve the competitiveness of Europe's economy and with that the prospects for strengthened employment and sustainable growth across our Continent. All too often in the past several years EU leaders have gathered to respond to aspects of the economic and financial crisis. This month's meeting was not about that. Last week we took the time to calmly and seriously reflect on these critical long-term policy issues.

The European Council deals with many urgent issues. When we meet next month, for example, we will have an agenda that includes following up on the compact for growth and jobs, in which regard I expect we will have a particular focus on unemployment, progress on banking union and steps to strengthen economic and monetary union. For making space in our agenda this month for discussion of the important as well as the urgent, President Van Rompuy is to be commended.

EU leaders also had a brief discussion on the evolving situation in Syria ahead of the discussion among foreign Ministers on Monday. Importantly for Ireland, the European Council took a formal decision which confirms that each member state will retain the right to nominate a member of the European Commission. This decision represents the fulfilment of a promise made to the Irish people following the outcome of the first referendum on the Treaty of Lisbon. I also availed of the opportunity of last week's meeting to update colleagues on the considerable progress that the Irish Presidency has made across a wide range of briefs from agreement on a single supervisory mechanism for European banks to new rules for discards of fish. Across the board, Ireland as Presidency is working hard and, I am happy to say, making things happen for the European Union and its member states.

Our discussion of energy at our meeting last week was a good one. As I indicated to the House last week, it was set clearly in the context of the EU's efforts to promote growth, jobs and competitiveness, consistent with Irish Presidency objectives. Secure, affordable and sustainable energy supplies are crucial in that respect. There was a clear view that it is the right time for a strategic discussion on the challenges and opportunities for Europe in adapting to the new realities of global energy markets. Our exchanges were informed by a very useful presentation from President Barroso.

The impact of the financial crisis means that we are seeing a fall in private investment and tighter financing conditions. The growing role of unconventional hydrocarbon resources in the US energy mix means that it is on its way to becoming a net gas exporter. This results in a widening gap with European industrial energy prices and an increase in the use of CO2 emitting coal in Europe's power plants. International Energy Agency figures indicate that between 2005 and 2012 real industrial electricity prices for European OECD members increased by more than one third, while the US showed a small decrease. There was a smaller increase for households, at just over one fifth but this is more than double the corresponding increase in the US. At the same time, we collectively face a significant increase in global energy demand, driven in the main by the growing strength of the emerging economies and pointing in the direction of rising prices. Global energy demand is set to grow by more than one third over the period to 2035, with China, India and the Middle East accounting for well over half of this increase. This increasing pressure on global energy resources should be seen against the backdrop of some countries phasing out their nuclear power production following the Fukushima disaster. The reality is that Europe is very far today from producing the energy needed to cover its own demand. Import dependence has actually increased in the past two decades and is set to account for more than four fifths of oil and gas consumption by 2035.

President Barroso also pointed out that investments in the European energy sector are currently running at historically low levels, at a time when sustained investment is needed in power equipment, grids, transport technologies, infrastructure and efficient buildings. As I indicated to the House last week, Europe will need investments in new energy infrastructure worth an estimated €1 trillion between now and 2020. It is the Commission's assessment that Europe faces rising energy costs under all scenarios but will stand to benefit most from setting a clear decarbonisation path for the period to 2050.

Europe's energy agenda therefore confronts us with choices that are far from straightforward. While acknowledging that there are no easy energy options, we agreed on a series of guidelines that will underpin a sustained commitment by member states in four key areas. The first area is the area of energy efficiency, including innovative financing of necessary retrofitting investments, which I highlighted in my own contribution. These are win-win measures that will reduce costs, emissions and imports, while also providing a significant boost to recovery in the real economy.

The second area is the internal energy market. We reaffirmed the deadline set at the beginning of 2011 to have all rules and standards in place by 2014 and all countries part of a common grid by 2015. We can make significant efficiency gains from more integrated markets in terms of potential annual savings in the region of €60 billion for gas and electricity.

The third area is supporting the significant potential for new investments, where predictable energy and climate policy will be key. We welcomed the Commission's green paper on a 2030 framework for climate and energy policies and will return to this issue next March after the Commission makes concrete proposals. Our conclusions also invite guidance from the Commission on efficient and cost-effective support schemes for renewable energies and on ensuring adequate generation capacity, while acknowledging the role of structural funds, project bonds and enhanced European Investment Bank support.

The fourth area is diversifying our energy sources. In terms of the geographical spread of European imports, this means making sure no country relies on a single supplier or supply route. It also means making full use of Europe's own unrealised energy potential. This includes setting a clear path for greater deployment of our renewable resources, which can also become an important driver of investment and job creation in the real economy. It is also likely to include developing safe and sustainable ways to bring other non-renewable resources - conventional and unconventional - into the energy mix where appropriate to national circumstances. The Commission will present an analysis of the composition and drivers of energy prices and costs in member states before the end of 2013, with a particular focus on the impact on households, SMEs and energy intensive industries, including looking more widely at the Union's global competitiveness.

The world is undergoing a major energy transformation and Europe must shape its own clear and collective response. Completing work on the internal energy market will remain of overriding importance and will continue to underpin all three pillars of EU energy policy, namely, sustainability, competitiveness, and security of supply. The Irish Presidency had already set the goal of agreeing conclusions on the Commission's internal energy market communication at the June energy Council in Luxembourg. Last week's meeting reinforces the importance of that objective, as well as providing energy Ministers with important political guidelines for their discussions.

We agreed that energy Ministers will report back to us by the end of the year on the implementation of these guidelines.

Last week's European Council discussion on taxation covered three main areas, namely, the automatic exchange of information for tax purposes, combating VAT fraud and international measures to tackle aggressive tax planning. As the holder of the Presidency, Ireland has been prioritising work in the tax area on measures to combat tax fraud and evasion. We are working closely with the European Commission and member states. We have an ambitious agenda and are making real progress.

Building on the work of the ECOFIN Council currently chaired by the Minister for Finance, Deputy Michael Noonan, I am pleased to report to the House that this meeting of the European Council sent a strong signal of intent in the area of automatic exchange of information and combating VAT fraud. The Council had a broad discussion on the recent initiative for a pilot multilateral agreement on the automatic exchange of information. This pilot agreement builds on the US Foreign Account Tax Compliance Act, FATCA, agreement that Ireland signed with the United States in January 2013 when we became the fourth country in the world to do so. Ireland has indicated its willingness to participate in the pilot initiative.

President Barroso also indicated that the Commission will shortly present new proposals for European Union legislation to expand the types of tax information that is automatically shared between tax administrations within the EU. It is hoped this new legislation will be discussed by Finance Ministers at the June ECOFIN Council.

The revision of the EU savings directive was also discussed by leaders. However, not every member state was in a position to indicate it could adopt the proposals at this time. Nevertheless, it was agreed that the proposals would be adopted by the end of the year. I welcome that clear statement. The Commission has been invited to negotiate revised bilateral savings tax agreements with Switzerland, Monaco, Andorra, San Marino and Liechtenstein on the basis of the latest version of the proposal. I am pleased to note that finance Ministers agreed this negotiating mandate earlier this month under the Irish Presidency. This is an important step forward in an area where progress had been stalled for a number of years. Ireland will continue to work towards the rapid adoption of the revised savings directive.

VAT fraud costs member states tens of billions of euro per annum. To effectively fight this fraud the European Council agreed that the Irish Presidency anti-fraud VAT package should be adopted by June 2013. This is a priority for the Presidency and we are confident we can secure the necessary support to adopt this package before the end of next month.

In the area of aggressive tax planning, the European Council gave a strong mandate for member states to co-ordinate their positions in advance of the G8, G20 and OECD meetings. Like all other EU member states, Ireland believes in fair tax competition. Building on the work of the OECD, global forum on tax transparency and code of conduct on business taxation, unfair tax competition is an issue that needs to be addressed.

In addition to last week's European Council discussion on taxation matters, the Irish Presidency, during its term, has put a strong emphasis on combating fraud. Following the informal meeting of ECOFIN in April, the Minister for Finance, as president of ECOFIN, jointly wrote to all finance Ministers with Commissioner for Taxation Šemeta identifying seven key actions member states could adopt by the end of the Irish Presidency which would make a significant difference in the fight against fraud and evasion. Agreement on the seven measures outlined in the joint letter is essential in tackling transnational tax fraud and tax evasion. As I noted when I came before the House ahead of last week's European Council, thus far, four of these measures have been adopted and the Irish Presidency is working towards adoption of further measures at the June ECOFIN Council.

Although not initially on the agenda of the meeting, the issue of European Union policy on Syria, in particular the question of the arms embargo, was briefly raised by Prime Minister Cameron and President Hollande at last week's European Council meeting. Deputies will be aware that both the United Kingdom and France have made clear for some months that they favour amending or lifting the EU arms embargo to allow the provision of arms to the main opposition grouping, the Syrian National Coalition. After a short exchange of views, the European Council decided to ask foreign Ministers to address this topic as a matter of urgency and the Tánaiste and his European colleagues had a thorough discussion at the Foreign Affairs Council meeting which took place in Brussels last Monday. Regrettably, it did not prove possible to reach agreement on extending the arms embargo, which will now expire on 31 May. It is important to emphasise, however, that the European Union remains fully united and committed to seeking a political resolution to the current crisis.

The Foreign Affairs Council also agreed on Monday that the European Union will spare no effort to create the appropriate conditions for the success of the planned Geneva II peace conference, initially proposed by the US and Russia earlier this month. Furthermore, member states have committed not to take certain steps in advance of the conference, while the Council will further review its position on Syria before 1 August.

While the main focus last week was on the issues of energy and taxation, I am pleased to report to the House that this month's European Council meeting also took an important formal decision to the effect that the European Commission will continue to include one national of each member state. The House will recall that the Lisbon treaty stipulated that the number of Commissioners would fall from 2014 onwards, except in the case that the European Council decided unanimously that this would not be the case. In December 2008 and June 2009, the European Council noted the concerns of the Irish people with respect to the Lisbon treaty and agreed that, provided the Lisbon treaty entered into force, a decision would be taken, in accordance with the necessary legal procedures, to provide for the Commission to continue to include one national of each member state. Last Wednesday, the European Council formally delivered on that promise to the Irish people. Naturally, I welcome the decision, which will be reflected in the new Commission to be appointed next year. It is an eloquent, if understated, reaffirmation that the European Union delivers on its promises.

The outcome of this month's European Council was a welcome one as its focus energises on two important policy areas - energy and taxation - which are critical to Europe's competitiveness, employment and growth. In both policy areas our conclusions provide a most welcome set of guidelines for further work to be undertaken, including by the Council. As the holder of the Presidency, this is extremely helpful to Ireland's ongoing efforts to progress a range of files across both these briefs.

Beyond these topics, we will continue to deliver progress, to the maximum extent possible, during the remaining four and a half weeks in the chair. Our actions are at all times driven by our primary objective of restoring stability, while at the same time supporting sustainable growth and job creation. I will continue to keep the House updated on all relevant developments.

The best that can be said for last week’s summit is that it received very little attention and did not cause any new crisis. The Taoiseach clearly shares my view that the summit was inconsequential given that he was prepared to postpone this debate for several weeks. However, the record shows that at a time of urgent need for action the leaders of Europe chose to spend their time on the formal discussion of longer term items. They did not discuss a single item which could create a job this year or next year for one of the 27 million unemployed people in Europe. They did not consider any measure which would restore the bank lending that is vital to the survival of businesses and families. They did not even address the delays in implementing already agreed policies.

The summit’s agenda was effectively as set out early last year. It did not include any significant new input from the Irish Presidency and did not reach any formal agreement. While the areas of tax and energy are important for the long-term economic success of the European Union, they are marginal to immediate needs. Throughout the five years of this crisis there has been a constant pattern of periods of relative calm being wasted as leaders fall back into complacency. Inevitably, they wait for new turmoil in the markets before taking long needed decisions. Unfortunately, we are now in another period of complacency. There is no discernible movement on any of the urgent measures which should be taken this year to restore confidence and growth to the Union.

Two weeks ago, the President of the European Central Bank, Mr. Mario Draghi, outlined what he considers to be the economic strategy of the European Union. He summed it up this strategy as "confidence, credit and competitiveness". Mr. Draghi, who has been by far the most constructive force for change in the Union in the past two years, said this approvingly. The problem is that it is the same strategy which has been in place for the past five years. No one can argue that the current strategy is working and it is unrealistic to expect it to suddenly deliver growth.

The highly discouraging decision taken at the March summit on the European Union’s budget confirmed there will be no direct stimulus from Europe - on the contrary. I accept that the scope for changing the current position in the near future is almost zero. The Taoiseach and everyone else should not speak of this as a good agreement.

As a result of this, we must focus on other steps that can be taken. There are four specific actions which could be taken by the Union in the coming months and which would, collectively, have a positive impact on the economy. These are: support for extra investment by states which can afford it; completion of the banking union; political support for the European Central Bank's new lender of last resort facility; and a frontloading of some programmes in the new budget.

There are states, such as Ireland, which have no alternative but to maintain a policy of further cutting deficits. However there are others which have significant room for maintaining or even increasing spending. The common policy of cutting deficits has made the economic situation of all countries worse, with most now missing both growth and budget targets. At June's summit, EU leaders will sign off on country-specific economic recommendations. Ireland and other states should insist that these recommendations should end the policy of uniform austerity. States may well continue with their self-defeating policies but we should stop endorsing them and should support any states which have room for stimulus spending to implement it.

The absence of a banking union to go with monetary union was at the very core of the creation of the financial crisis. The agreement to form a banking union was seen as impossible two years ago but it has now been agreed in principle. Without this union a restoration of normal credit flows within the eurozone is impossible. In the context of the core pillars of such a union, namely, regulation, deposit insurance and a resolution regime, the negotiations taking place are at best delivering a semi-banking union. Without a single approach covering the entire eurozone, the basic principle of sustainable confidence in the banking system will not be achieved. If the negotiating process goes on for too long and if the final agreements continue to be watered down, a renewed destabilising of banks is entirely possible. We should not be willing to accept something we do not believe delivers what is needed. The pace of negotiations must be speeded up. This matter should be a permanent item on the agenda of full Council summits until it is finalised.

A rapid collapse of the euro was avoided by the statement from the ECB last July that it would do "whatever it takes" to save the common currency. This marked a radical departure from rigid orthodoxies and immediately restored confidence in European investment markets. This move was an unequivocal success. However, it continues to be the subject of regular sniping and the legal basis of the most important measure - outright monetary transactions - has been challenged at senior political level. If any part of the ECB's new strategy were to unravel, the impact would be severe. Even with these changes, the euro does not have a central bank which can support long-term growth. However, it has at least stopped causing major damage. It is surprising how few political leaders have clearly outlined their support for the ECB's new policies. This is serious because there has been no push-back against the flawed claims that the ban on monetary financing of governments has been infringed. There is a clear need for political leaders to address this matter and, at the very least, to prevent any doubt about whether the ECB's new policies are permanent.

The multi-annual funding framework agreed in March is a step backwards for the Union. An already inadequate budget is to be cut and the sharpest reductions will be made in areas where the Union is making the biggest impact. The Taoiseach said yesterday that the level of youth unemployment in Portugal and Spain is shocking. That is true, but what is also shocking is that he and the other leaders of the Union are pretending that they are doing something by creating a fund worth €144 per year to each young unemployed person throughout Europe. I accept that the deal will not be reopened. However, there are specific steps which could be taken to immediately improve its impact or at least to delay its most damaging features. The European Parliament's demand that this year’s shortfall should not to be taken out of the budget should be supported. I have not heard the Taoiseach indicate whether he supports this demand. Where it is possible to bring forward investment initiatives or support programmes, these should be frontloaded. The 10% cut in rural support schemes has already been deeply damaging. We are led to believe that there will be a conclusion in respect of the negotiations on the Common Agricultural Policy by the end of next month. I sincerely hope the final deal will preserve family farms as well as productive farmers.

The final immediate step which could be taken to help recovery would be to ensure that all countries are treated equally and that none suffers disproportionately from the fact that current policies were absent in the first four years of the crisis. It is incomplete but there is at least today a framework for dealing with banking collapse and sovereign debt pressures. Some countries, including Ireland, did not benefit from the new measures and were effectively left to carry an unfair burden as Europe sought to hold the line on policies now acknowledged as failed. As the Taoiseach belatedly put it in October, "Ireland was the first and only country which had a European position imposed upon it in the sense that there wasn’t the opportunity, if the Government so wished, to do it their way by burning bondholders". The Taoiseach does not like to repeat this much because it gets in the way of party politics. It is, however, a powerful case for Ireland.

These legacy issues are not some side point of little relevance. They actually go to the heart of achieving recovery and restoring popular support for the Union. There is a shared responsibility for the failures of past European policies and this has not been fully acknowledged. The recent deal on promissory notes represents progress, but it goes nowhere near meeting the justice of Ireland's case. The entire fiscal benefit of that deal could unravel if the Central Bank of Ireland were to be forced to sell off its new holding of bonds earlier than planned. If recovery in Ireland is to be fully underpinned, further movement is required. Specifically, the ECB should not only allow the Central Bank to hold its Irish bonds to maturity, thereby returning interest payments to the Exchequer but it should also commit to returning to each country's central bank the profits on its holding of sovereign debt. A deal on this has already been of significant assistance to Greece. If these two measures were implemented, Ireland's fiscal position would see a secure improvement of more than €2 billion per annum. Their implementation would also remove much potential for resentment regarding unfairly carrying the burden for the inflexible and failed European policies of the recent past.

At present, 100% of the space in budget figures about which Ministers have begun to argue has developed as a result of changes in European Union policies on debt. A more comprehensive and equitable response would make a huge contribution to Ireland's recovery as well as to the recoveries of other countries. As was long scheduled, last week's summit addressed the issue of the administration of tax systems, particularly to combat fraud. Nothing surprising emerged in the final communiqué. The measures involved should be studied further, but in principle, they are to be welcomed.

The international headlines concerning our administration of corporate taxation were not helpful and, in many cases, were not informed. This is a complex area and it is simply not the case that Ireland is or ever has been a tax haven.

Over the years, we have given up key areas of tax competition in the name of transparency and co-operation. It appears the US issue is with the failure of its companies to repatriate profits. It is not that they have been routed through Ireland. In cases such as that of Apple, one is faced with a major employer which has been here for decades. Much of the work carried out by it and other multinational companies would be lost to Europe were Ireland not so successful in attracting them and allowing them to make a long-term commitment to growth. I wish to acknowledge the words and actions of the Taoiseach, the Tánaiste and the Minister for Finance, Deputy Noonan, during the past week and also those of our diplomats and Industrial Development Agency Ireland. It has been a well-argued response. I ask the Taoiseach to reinstate an initiative we put in place in the United States some years ago when similar comments relating to this matter were articulated in Congress and elsewhere. At that time we took the step of locating in the embassy in Washington DC a particular team with expertise additional to that possessed by the then diplomatic team to combat the lobbying taking place in respect of and the misinformation being spread about Ireland. It is important we would up the ante in the context of Ireland's presentation of its case internationally, particularly in the United States.

The Taoiseach is also right in pointing out how a secure and affordable energy supply is vital for economic growth. However, he is wrong to say that any major new policy has been agreed or that what is to be agreed this year will play a role in our recovery. The benefits of a single energy market are some way off.

Given that there was room on the agenda to discuss international developments, it was surprising that the leaders had nothing to say in their communiqué with regard to Syria. I have concerns about the position taken by Ireland at this week's Foreign Affairs Council and its argument against lifting the arms embargo on the Syrian rebels. I accept that this is not a black and white issue. History indicates, however, that such embargoes are inherently one-sided. Russia, Iran and others have sold major amounts of arms to the Assad regime.

Hizbollah, which is a client organisation of Iran, has confirmed that it is directly involved in fighting on the side of the regime. As such, an arms embargo significantly impacts on only the rebels.

In Bosnia 20 years ago, the imposition of a supposedly even-handed embargo directly aided Milosevic and caused significant damage to the Bosnian Government. We should not allow such a situation to recur. The surest way to undermine an agreed settlement is to allow the regime to strengthen its position or to convince the rebels that they can only win support from the extremes. The Franco-British position is the correct one.

Separately, we need to step up Europe's support for democracy in the Middle East and elsewhere. This week, the secretariat of the European Endowment for Democracy, EED, opened its doors in Brussels. This was the initiative of Radek Sikorski, a former Polish Foreign Minister, when he held the Presidency of the Council. It is an excellent development and we should congratulate him on bringing the project this far. Ireland should commit to becoming a major funder and supporter of the EED.

I welcome the Council's formal decision confirming that every member state will continue to have one Commissioner, as per the agreements that I negotiated with Europe in terms of the second Lisbon treaty and the Irish referendum. This should be acknowledged across the board, including by those who opposed the referendum. We all recall the posters asserting that Ireland would lose its Commissioner if the treaty was ratified. We took that view on board, as research indicated that people were concerned about the loss of a Commissioner, and achieved an agreement under which every state would retain its Commissioner. We fought on this and other protocols, for example, corporation tax, abortion etc. All of these have been delivered in European policy. Away from the heat of a referendum campaign, all sides of the House and the debate should acknowledge that the particular clarion call of the first referendum, namely, the retention of a Commissioner for every member state, has been delivered upon. This shows that the voice of the people mattered in the evolution of the Irish position and European policy.

Tax avoidance and evasion were two of the key issues discussed at the EU Council summit. Last week, we had the startling revelation that one Apple subsidiary was only paying a 2% tax rate, well below the 12.5% statutory rate. It is important to acknowledge that multinationals have brought and continue to bring much needed investment and job creation to our communities. However, there is a world of difference between corporations that are based in the State and properly pay their tax and "brass plate" companies that funnel money through the State, taking advantage of loopholes to avoid paying tax.

Last week in Washington, Apple disclosed that one of its Irish subsidiaries held profits of $30 billion, had three directors, no employees and paid no tax in Ireland or the US. Yesterday, it was revealed that Abbott Laboratories Ireland Limited, a company registered in Ireland, made €1.8 billion in profit but paid 0% in tax. Accounts for Abbott Mature Products International Limited cite the company as being a "non-resident Irish entity incorporated in Bermuda". It would have been liable to pay €235 million in Irish corporation tax had it not been exempt under the tax code. When the State is being described as and accused of being a tax haven internationally or by our trading partners, there is some credibility to the claim. It does serious damage to brand Ireland.

Despite the controversy, the Dáil still does not have a full explanation from the Government on whether it reached an agreement or understanding allowing multinationals to avoid tax. It seems that we are operating two different tax systems - one for big multinational corporations and a second, more onerous system for small and medium-sized indigenous companies and individuals. As the Acting Chairman will recognise from his long experience, this is not a fair system of commerce and is undoubtedly hurting our domestic economy. It is contributing to our stagnant local economies, encouraging emigration and keeping unemployment levels at 14%. PAYE workers are bearing the brunt of tax increases and social spending cuts, yet wealthy, influential corporations are able to escape through tax avoidance measures.

Sinn Féin recognises that investment from multinational corporations in Ireland has provided much for the State in terms of job creation and payroll taxes. These jobs need to be protected. However, the Government should move to close tax loopholes and work with our international partners, especially within the EU, to improve tax collection efficiency and tackle tax evasion and fraud.

We should also be mindful that tax avoidance by global companies severely disadvantages and discriminates against people in the developing world. Surely we have a duty to stand by those citizens. There have been missed opportunities during the Irish Presidency, including at the recent summit, to raise critical issues about the developing world and the Middle East.

I wish to address the ongoing tragedy in Syria. The Tánaiste attended talks with other EU foreign Ministers on the crisis this week. He argued against a relaxing of the arms embargo on Syria. I commend that position and part company with Fianna Fáil on the issue. It is disappointing that, after 14 hours of talks, the EU foreign Ministers could not agree a united position on Syria and the embargo. Consequently, the embargo will not be renewed and EU member states are free to ship arms to Syria from 1 June.

While there has been a political declaration to the effect that no one will ship arms for the moment, this is undoubtedly a retrograde step that risks further militarising the conflict. The reaction of the Russian Government, which yesterday pledged to arm the Assad regime further, seems to confirm this.

The war in Syria has already claimed more than 80,000 lives and created 1.5 million Syrian refugees. Sending more weapons will increase the bloodshed and deepen the conflict. This risks further destabilising the region, especially Lebanon and other neighbouring countries that are already struggling to host significant numbers of refugees. The best way - indeed the only proper way - to stop conflict is through talks and building a peace process. The USA and Russia have recently shown interest in creating a forum for the Syrian Government and rebels to try to start peace talks. This idea is welcome and needs to be encouraged, nurtured and given more time. It should also be overseen by the UN and neutral countries with no vested interests in Syria.

One must ask whether the Government is concerned about the lack of unity in the EU on the issue, given the lack of discussion and initiative. I understand that the Austrian Government is worried that the decision could pose a threat to its peacekeepers in the UN contingent on the Israeli-Syrian border. Is the Government worried about Irish troops serving in the region?

It is appropriate that today is the International Day of United Nations Peacekeepers. We should commend the work of the Defence Forces, which have contributed and continue to contribute to UN peacekeeping duties in difficult and dangerous situations around the world.

Does the Government expect further contacts between EU Governments on the issue of Syria in the coming weeks? Could it not put the issue on the agenda before the end of the Irish Presidency?

Like our spokesperson on international affairs, Deputy Crowe, I have long lobbied the Government on the need to be more involved in resolving the Israeli-Palestinian conflict. Numerous times, I have raised the EU Heads of Mission Jerusalem Report 2012, which was handed to EU Governments in January but does not seem to have been acted upon. Israeli settlement building remains one of the greatest threats to the two-state solution to the conflict in the Middle East. The ongoing construction in Jerusalem and the West Bank has ensured that peace talks cannot be restarted.

In 2012, Israeli settlements in Palestine grew by approximately 1,977 acres and all land expansions in 2012 were approved by the Israeli military order. The settlements are illegal and against international human rights and humanitarian law. The Israeli Government is in direct breach of international protocols. According to a new study by AIDA, the Association of International Development Agencies - a coalition of 80 aid agencies - the Israeli Government also demolished 535 Palestinian-owned structures between May 2012 and April 2013, displacing 784 people, more than half of them children. This is ongoing war rather than a peace process. Israeli forces also demolished 30 EU-funded structures, such as water cisterns. The actions are in direct contravention of EU initiatives as well as the rights of Palestinian citizens.

In May 2012, EU foreign Ministers urged Israel to halt the "forced transfer" of Palestinian people and to "comply with its obligations under international law". One could ask when we are going to do something about the situation. An active system of apartheid is in place. One could also ask when the EU is going to tackle the Israeli Government over its breaches of international law. It will be a significant loss of opportunity during the Irish Presidency if the issue is not put on the agenda before the Presidency ends. I again urge the Taoiseach to raise the matter at future EU Council meetings.

I very much welcome the Tánaiste's recent statement that goods from illegal Israeli settlements in the West Bank should be clearly labelled in all EU countries. The EU’s High Representative, Catherine Ashton, has already circulated a proposal for the labelling of such goods and consumers could, in effect, boycott the goods if they wish. I have no doubt many Irish people would refuse to buy the products. The Government and the EU have repeatedly condemned what the Israeli Government is doing but we need to follow through on the rhetoric and follow the logic of the position by not only introducing specific labels for such products but introducing an outright ban on the sale of settlement goods.

EU agriculture Ministers were engaged in discussions in recent days in Dublin Castle on reform of the Common Agricultural Policy. We are aware of the significant impact decisions taken on CAP will have on the future sustainability and viability of tens of thousands of farmers. The current system is badly skewed in favour of a small minority of recipients, many of them not active farmers, who receive the lion’s share of the single farm payment. It is vital therefore that the new system includes a significant redistribution of funds towards the majority of working farmers, many of whom are struggling to maintain a viable income. No one is advocating that productive farmers should be at a loss but the claim that those who stand to benefit from a redistribution are "unproductive" is an insult to tens of thousands of farmers across this island and in particular in this State. It is not a valid defence of a system in which in some counties a handful of individuals and companies receive as much in payment as hundreds of others.

I wish to return again to the fodder crisis which is having a devastating effect on farmers. I met members of Louth IFA last week to discuss it and other issues. Farming organisations have estimated the crisis could cost farmers approximately €1 billion and result in beef and dairy farmers losing up to 60% of their income for this year. Teagasc has indicated that dairy farmers on heavy soils could be confronted by a 50% reduction in fodder supplies. Farmers in Louth and other such counties have been badly affected. There has been an increase in the number of calls to an emergency helpline and even interventions by the Society of St. Vincent de Paul to assist farm families. While I welcome the efforts made by the farm organisations, commercial bodies, community and voluntary groups and the Department, there is still a feeling that more could and should be done to ensure that no more animals die because of a lack of feed. The Minister for Agriculture, Food and the Marine must take whatever steps are necessary to tackle the current crisis. I asked a question yesterday but I did not get a reply on whether the Government had considered seeking support from the EU Solidarity Fund for emergency funding to address the crisis.

The Taoiseach acknowledged that youth unemployment is unacceptably high. In this State the figures are disguised famously and historically by the flight of many young people to other parts of the globe, yet there are no concrete programmes to provide work for them. Austerity rules when growth and stimulus are needed. Austerity is the mark of the Government and, regrettably, it is likely also to be the legacy of our Presidency.

I wish to share time with Deputies Joe Higgins, Shane Ross and Mick Wallace.

Is that agreed? Agreed. Speakers have 15 minutes between them or three and three quarter minutes each.

There are many occasions when the issues we discuss in the Chamber could almost be amusing if they were not so serious. There has been quite a bit of that today, starting with the announcement in some media that the EU Commission is issuing what were described as "much-awaited economic guidelines for member states". I would like to know by whom they are much awaited because I did not notice many people at bus stops, in pubs or walking down Grafton Street saying they could not wait for the EU Commission to issue its new guidelines on how economies should be organised in EU member states. There is a good reason why people in this country are not waiting with bated breath for what the EU Commission might suggest for the economy. It is because for the past five years they have been victims of what the EU Commission has dictated and directed for this economy and that has had utterly disastrous consequences for the economy and for the vast majority of citizens. The EU Commission, along with its friends in the IMF and the ECB were the people who said from the outset when the crisis hit – a crisis they had to a large extent facilitated in the first place – that at all costs bondholders and banks must be protected and ordinary people must bear the cost of an unprecedented economic crisis.

Five years on even they now have to admit that the policy has been a disastrous failure with every single meaningful indicator from the point of view of ordinary citizens showing that the policy has made things far worse, not better. They have certainly succeeded in protecting the banks and the bondholders, but from the point of view of unemployment, we have a crisis that is unprecedented since the 1930s. We have a disastrous situation from the point of view of youth unemployment, the future of the economy and society with a quarter of young people across Europe left to rot and who are not allowed to contribute to society.

Finally, our EU masters are forced to admit that we have reached the limits of austerity but its alternative, which we can expect to hear in the “much-awaited guidelines” is for so-called structural reforms which is a euphemism - the EU admits it does not mean more investment in the economy – for privatisation and imposing what it calls greater flexibility on workers, which in other words means sacking workers, cutting their pay and conditions and forcing young people to emigrate. That is what flexibility means. The alternative, which the EU Commission should be discussing, and which was finally discussed at the EU Council, is to get the investment funds that our economy and the European economy needs from those who are holding the money. The people who are holding the money are the corporations which this Government is facilitating in dodging their taxes. That is what we should be doing.

The Government should end its state of denial about Ireland's tax haven status, own up to its guilt in facilitating corporate tax-dodging and demand that multinationals making tens of billions in profits pay their fair share of tax in order that the country has the revenues to invest in employment and economic growth.

This European Council meeting was billed as a co-ordinated effort against tax evasion to attack tax dodgers throughout the world. The Taoiseach was highly unfortunate in that the day before he travelled, he was ambushed from the United States. Moreover, when United States Senators Carl Levin and John McCain made their comments, at least one of them accused Ireland of being a tax haven. This sent absolutely wrong reverberations around the world that Ireland somehow was in the same bracket as places such as the Virgin Islands, the British Virgin Islands, Vanuatu and so on. This is not where Ireland stands on the tax evasion or tax haven spectrum. What Ireland does is something different. While I acknowledge it is somewhat unusual for me to state this, what the Government has done in respect of holding onto the corporate tax rate is utterly right and I urge it to continue to hold that position. It will be difficult to do so because those in Europe who have been gunning for Ireland's 12.5% corporate tax rate for so long will take great encouragement from our supposed friends in the United States, who have taken a pop at us and accused us of something of which we blatantly are not guilty.

What we do very well is indulge in tax competition, which is rife in Europe. It would be naive of any Member not to recognise that tax competition is increasing by the day. Portugal, Britain and the eastern countries all are cutting their corporate tax rates to a rate which is below that of Ireland. It is more complicated than that of course, because there are all sorts of little sweeteners offered. In this context, however, one should not forget about the French. The French rate of corporate tax is more than 30% - I believe it is 33% - but its effective rate is being hotly debated. It may be 8% or it may be 5%. Consequently, let not Members of this House, the French or our friends in Europe pretend that Ireland is committing some sort of cardinal sin when the dodges they are up to, if one looks at it that way, are specifically designed to deceive. I see nothing wrong with tax competition and consider it to be rather healthy. However, I do perceive the lack of transparency to be wrong.

Moreover, the response from the Taoiseach should perhaps have been a little more aggressive. While the efforts already under way by the IDA in America to deny the story are welcome, perhaps the Taoiseach should have stated that although Ireland is not a tax haven, people should come to look at our wares because Ireland is very attractive and not only does one get a 12.5% tax rate, there also are additional incentives. Let us not be ashamed of that because there are other legal incentives. In addition, let us not pretend otherwise; there are special deals. Different deals are offered to different people not on the tax rate, but in offering incentives to organisations to locate in certain regions or in respect of other allowances that are open to specific companies to attract them. In this context, I say thank God we have got Google, Apple and the rest here in Ireland and in consequence have those 150,000 jobs plus. Thank God that GDP has increased by God knows what percentage, as the IDA has stated it would drop by 30% were the multinationals to leave. This place would be an economic desert without those companies and while this may not be a welcome message, it is true.

I am afraid I must disagree with the previous speaker, Deputy Ross. While Ireland might engage in tax competition, it also engages in facilitating tax evasion on a serious level. Regardless of whether Members like it, Ireland is playing a strong role in a race to the bottom. Do Members wish to see a point at which corporations pay even less than their share and the ordinary citizen is burdened even further in consequence? The findings of Dr. Jim Stewart, professor of finance in Trinity College who is trying to map out shadow banking in Ireland, are interesting. He has stated that many of the companies involved are a way of removing assets or liabilities from a parent company's balance sheet and escaping the regulatory requirements that come with this. He stated that these companies, which are classified as non-trading firms, have a theoretical tax rate of 25%. In reality, they are able to use write-offs in Irish legislation to ensure they make no profits and consequently have no tax liabilities. Overall, Stewart is sceptical about the benefits of shadow banking to Ireland and has stated, "As far we’re concerned, we don’t get much out of this."

I also wish to raise the issue of the lifting of the arms embargo in the context of the summit. I disagree with Fianna Fáil in this regard and agree with the Tánaiste, who deserves credit for the stand he has taken on this matter. The lifting of the arms embargo definitely was a retrograde step and in response to anyone who thinks pouring more arms into Syria's sectarian war will either topple Assad or drive him to the negotiating table, I do not believe that will happen. Instead, it will lead to Russia playing a stronger role and matching any arms the French and British might provide. Moreover, I disagree with anyone who thinks Britain and France actually care about those who are suffering in Syria. I believe both parties are much more interested in using this conflict as a little bit of escapism from the realities of their political problems at home. It should be pointed out that much of the Western involvement in the Middle East has helped to destroy secular politics in the region and has unleashed the Shia-Sunni conflict that is tearing it apart. If one considers what the West has been up to in the region for the past ten or 20 years, secular politics has been damaged dramatically by Western involvement and what remains is really a Shia-Sunni civil war throughout the region. As for the idea that Shia and Sunni representatives should be sitting down to have a chat at the table, it simply is not like that, as for these people to accept one another would involve denying their faith and it is deeply rooted in Islam. However, the destruction of secular politics by the Western powers has caused much of the havoc now being witnessed.

The summit of European Union leaders of 22 May 2013 did absolutely nothing of substance to address the really serious economic crisis in many countries within the European Union. Against a background of 26 million people unemployed, nothing short of emergency measures is called for. Such measures, were they to be effective, would be obliged to take into account that capitalism, as an economic system, has utterly failed the majority, the working-class people of Europe. In the first place, it was the capitalist financial market system, with its unprecedented speculation and profiteering, that dragged the real economy into crisis and created the present situation. Moreover, the response of the European Union's economic and political elite says it all. Instead of addressing that issue, it puts the burden onto the shoulders of working people and poor people within the European Union. One need only consider the example of Greece, reduced to penury, or that of Portugal, Ireland and other peoples, suffering under the dreadful yoke of austerity, which now is widely recognised to be a total disaster. In response to the situation, one gets empty words from the President of the Commission, Mr. Barroso, as well as from Ministers in the current Administration, to the effect that austerity has reached its limits. However, words mean nothing.

The statement following the EU summit trotted out the same old clichés, relying essentially on the same system and the same institutions that caused the crisis to get us out of it.

I was interested to note that the communiqué drew attention to a fall in private investment across Europe. It also stated that investment in the European energy sector is at historically low levels. However, it did not draw attention to what has been in the financial press for the past two years, namely, that €3 trillion, that is €3,000 billion, of accumulated profits lies fallow in the coffers of big European corporations because they estimate it is not profitable enough for them to invest.

The summit then went on to discuss taxation but did not propose the type of radical action that would be needed, for example, a 60% emergency tax on the €3 trillion that is hoarded by these major EU corporations. That would release €1.8 trillion for investment in substantial job creation and necessary infrastructure and services across Europe to put the youth of Spain, the youth of Ireland and the youth of every country back to work and give them a future, by contrast to what is happening at this time. Similarly, it did not propose putting those funds into energy generation, clean generation or public generation.

How can an Irish Government bring any credibility to a taxation argument, however, when the taxation laws and structures of this State are used by some of the biggest multinational corporations on Earth to evade and avoid paying billions of euro of taxes? Those who deny that is the case are denying a reality that is well-proven at this stage.

The current economic and political elite in the European Union promise only a continuation of the same old failure of capitalist policies. The masses of European working people and poor people should rise up in opposition and revolt, demanding an alternative, which would be a democratic and socialist alternative, for the resources to be released for public investment into productive sectors of society where the financial institutions are in public ownership and under democratic control, and for a plan to end this crisis to provide a future for the youth and work for everybody who is capable of it rather than relying on the same old failed structures that only promise ongoing suffering and crisis.

I call the Minister of State, Deputy Brian Hayes, to reply. He has five minutes.

I thank the Deputies for contributing to what was a useful debate. I might make some remarks on the key part of the summit on energy and then deal directly with the question of taxation asked by a number of colleagues.

One of the realities we must face is that the United States of America will become a net exporter of energy within a short number of years. The developments in the United States on fracking and the new explorations they have done mean that manufacturing in the United States is becoming significantly cheaper as a result. If one looks at much of the international literature, it is now cheaper to manufacture in the United States than it is to do so in China because of the increase in economic activity in China and the cost of transporting goods in particular and services.

The United States of America has got its act together on energy, and Europe must do the same. There is a challenge, to take up Deputy Higgins's point, about ensuring we get private sector investment in the energy market going again. We have said that from day one. In a circumstance where banks across the eurozone are not lending, we must ensure the framework is right for private sector investment to come in and fund not only public infrastructure projects but areas of energy policy as well. Good progress was made by the leaders in this area.

I understand there are four areas which now must be taken forward. They are energy efficiency, about which the Taoiseach spoke, competition in the EU internal energy market; getting the investment right - we reckon there is a requirement of close to €1 trillion for that investment to ensure we can become an exporter of energy in the same way the United States has become and China will become within a decade; and ensuring we have a diversified energy supply in Europe. These were issues of primary importance at the Council meeting.

On the question of taxation, on which we heard a number of contributions, I say boldly on behalf of the Government that we have nothing to be apologetic about. We have not in any way put to one side the views of other people on this issue. The reality is that major international businesses have located their business in many parts of the world. They have manufacturing here, trading there, sales elsewhere and intellectual property in another part of the world. That is the reality of modern trade and of the huge global corporates today.

The problem is not the 12.5% corporation tax rate in Ireland, which, as Deputy Ross stated, is entirely transparent. What one sees is what one gets. Our effective tax rate is within 1%-----

I did not interrupt the Deputy.

That is the view of the OECD. Our effective corporate tax rate is within 1%. In France, as Deputy Ross stated, which has a headline rate of 35%, the effective rate is somewhere south of 9%. There are various provincial discounts that countries employ that could be brought to bear in France and elsewhere. This is a competitive business. Even though we are in the European Union, and in many respects we have an integrated policy on a key range of areas, tax is an outstanding issue of domestic reserve within each member state, and that is as it should be because tax policy competition is essential in ensuring we keep business in Europe. Otherwise, those businesses will migrate to other parts of the world. We have an upfront, honest position where our effective tax rate is within 1% of the actual headline rate. That is not the case in other countries.

Huge sums of money are being made in the digital economy. When a consumer buys an iPhone or an iPad, 90% of its cost is not the circuits or the work that goes into creating those devices, rather it is the intellectual property, IP, that goes into designing and ensuring those devices have been made correctly. The fact that Bermuda can offer 0% to allow the IPs reside there is not the fault of the Irish Government. That is an issue for Bermuda, the Virgin Islands or many of the Crown dependency territories with which other members of the EU have an extraordinary relationship. That is the issue no one is speaking about, namely, these huge companies which can diversify at very low if not zero rates of tax in some parts of the world. We do not have special rates. This morning, the chief executive officer of Apple confirmed that fact. It is the position of the Irish Government that every effort will be made to take up the point colleagues have raised to ensure that issue is brought to bear.

There are things we can do but we must do them in the context of an EU-wide agreement. The biggest thing we must do is automatic exchange of tax information. There is a new gold standard which the US Congress is rightly demanding. For instance, we were the second country in the European Union and the fourth in the world to sign an automatic tax information exchange agreement. In other words, the Inland Revenue Service receives from the Irish Revenue on an annualised basis the tax affairs of companies and of US individuals in this country and vice versa. That is the new gold standard on which the OECD and the United States are looking to come into agreement, and that is the standard we are seeking to employ across the European Union in our work as holders of Presidency. We have nothing to be ashamed about or to apologise for in this area. We have a very strong record of tax compliance in this country. That is the way it should be, and that is the way it will continue.

I thank the Minister of State for that clarification.

It is an issue that has arisen in recent days as a result of a Senate hearing in the United States that sought to portray Ireland as a tax haven. The designation "tax haven" has some serious connotations. I am disappointed, notwithstanding the remarks of the Taoiseach at home, that while Ireland holds the Presidency of the European Union, he has not taken his case to the United States this week, to go to Capitol Hill to say not necessarily to parliamentarians but to the corporate world in the United States that Ireland is not a tax haven and that under the EU structures, no state within the Union can be classified as a tax haven. The connotations attached to the term "tax haven" conjure up all sorts of negative viewpoints for companies and investors in this country and Europe generally.

Why has the Taoiseach not taken it upon himself, while holding this important office for the next number of weeks, to make our case in the United States not just on behalf of Ireland but on behalf of the European Union?

The EU heads of mission Jerusalem report was handed over to EU governments in January but does not seem to have been acted upon. I have raised this a number of times with the Taoiseach so I will not rehearse it now. Can we get a commitment that it will be on the agenda during the Irish Presidency and acted upon because this report was issued by the EU heads of mission themselves?

Has the Government considered seeking support from the EU Solidarity Fund to address the fodder crisis? Austria had a similar crisis in 2002 and was able to secure funding from the solidarity fund.

The Minister of State claims Ireland is not a tax haven and that we have an effective corporate tax rate of close to 12%. If that is the case, could the Minister of State explain to me and the public why the European Union's own website, which shows figures for the implicit corporate tax rate across Europe, states that Ireland's implicit tax rate is 6.8%? Contrary to the Minister of State's remarks about France, the website shows France's corporate tax rate at 21.6%, Germany's at 17.1%, Greece's at 17.8%, Sweden's at 27.2% and Britain's at 17.7%. According to the EU Commission, our corporate tax rate is a fraction of the average across Europe. I am not saying it, the Commission is saying it.

Could the Minister of State respond the remarks of a former senior staff member in Google, who sent me an e-mail? He said that Google Ireland had a turnover of €47 billion between 2005 and 2011. The profits over that period were a minimum of €9.5 billion. Over that period, the company paid taxes of €69.91 million, a 0.7% tax rate. It is another company to add to the list, along with Apple and Abbot Laboratories. How can the Minister of State tell us we have a transparent corporate tax system when that is a reality?

This person explained how this works with Google. Google Ireland Holdings owns the internal systems and software the advertising network runs on. Google Ireland employs people, charges clients money and makes those profits. Google Ireland pays a licence fee to Google Ireland Holdings for the use of that software and in a strange coincidence Google Ireland Holdings Limited charges a fee that is almost exactly the amount Google Ireland Limited makes each year. Of course, the fee changes each year to match the growing profits. That is what is known as the double Irish; that is how it works, it is a tax dodge and we facilitate it.

We tax what is produced in this country and we are responsible for what comes through this country. We are not responsible for how corporate entities organise their tax affairs.

We are talking about Google Ireland.

The Deputy continually cites a gross profit figure but a huge amount of that figure, and I am not going to refer to the company because I do not want to be specific about any company, relates to activity that has nothing to do with this country. That is why when people extrapolate a rate of 2% or 3%, they are putting into all accounts the great majority of work that has no connection to this country. We tax what goes on in this country and for which we are responsible. We are not responsible for a relationship that might exist between a corporate entity and another tax authority where an element of that business resides. We are not responsible for that.

The gold standard in respect of the international community comes from the OECD and I refer the Deputy to the report of the OECD and the World Bank which has confirmed the Irish effective tax rate is 1% to 1.5% away from the actual headline tax rate. Why do I say the OECD is important? In the past two decades movement in this area has been clearly led by the OECD which recognises huge sums of money are being lost to domestic governments all over the world. The Taoiseach spoke about VAT fraud earlier but there are many other ways in which corporates can effectively organise their affairs to reduce their tax liability. The real issue for US multinational companies is to bring those profits back to the United States, where they are taxed at between 10% and 35%. Once they do that, those funds are not available to the businesses. That is the real issue and that can be resolved overnight in the United States if Congress decides to implement a law in that regard.

The OECD has led on this issue. That is why we have 69 separate double taxation agreements with countries around the world. That is why we have this automatic tax exchange agreement with the United States, which incidentally is becoming the way in which the Europeans are going to negotiate with our colleagues in America. America tells us it wants this automatic tax exchange information on an annual basis for the companies and individuals in Ireland. We can now do that: it is a totally transparent system. The real issue is if the 26 other member states of the European Union will come to that agreement. The logic of the position is that we should have a common position with the US on this issue and we are working to achieve that.

Deputy Adams asked about the EU heads of mission report on Jerusalem. I agree that it should be put on the agenda and we will work to see if we can obtain agreement on that between now and the end of the Presidency. I will get the Deputy the information on the emergency funding for fodder. If it is possible the fund would become available, it would make sense to use it.

The Minister for Agriculture, Food and the Marine, Deputy Coveney, is in Brussels regularly to see exactly what additional support can be obtained, but I will get the Deputy the latest position on the matter.

Deputy Dooley asked why the Taoiseach is not going to the United States this week to beat his breast about this issue. As the Deputy will be aware, the Taoiseach spends a considerable amount of time in the United States of America drumming up business, ensuring the Irish story is understood, including as President of the European Union, and he will continue to do that.

Deputy Dooley did not refer to this matter of tax haven; Deputy Boyd Barrett did. This is a dangerous business. We are talking about more than 150,000 good well-paying jobs, directly and indirectly in this country. These jobs, in manufacturing, financial services, distribution and IT, are putting significant numbers of our people to work. We have managed to get those companies to this country, not only because of the 12.5% corporate tax rate but because we are English speaking, we are in the eurozone-----

-----they have good access to the European market, and we have become more productive and more competitive because of what has happened in this economy over the past five or six years. That is why US businesses are coming to Ireland and creating employment in this country. The Taoiseach continues to drive that investment pipeline and day in, day out the agencies are working hard to ensure the Irish success story is understood in the United States of America.

As to the argument of a tax haven, let us be clear that it is not the view of the US President. It is not the view of his Administration, of the Under Secretary of State for International Trade and of members of President Obama's Cabinet. This phrase about a tax haven in the case of Ireland is bandied about by some members of the US Senate and Congress. Why would the President of the United States entertain any visit to this country if we were an alleged tax haven? People need to realise that we should not get sucked into a game.

The same is the case for the British on this issue. Recently, the British, in their tax law, introduced a new royalty payment of approximately 10% - an extraordinary write-off for businesses. The city of London has very interesting ways in which subsidiary companies can fund other business, in terms of finance, at zero per cent. They have done that because of tax competition as well.

We should not be led by the nose, either by a US congressional committee or by the mother of all parliaments.

I want to facilitate one other question, from Deputy Ross, and there are four and a half minutes left.

We should not be led by the nose by a group of parliamentarians, no matter where they are, which is picking on us as a small country because we have a competitive approach to tax policy.

In response to the Minister of State, I want to ask him about these two US Senators who have made this statement that we are a tax haven. I would agree with him. I would have thought these are two mavericks who are having a go and being irresponsible. In that light, perhaps he could respond as to what is official United States policy about our corporate tax rate and corporate tax behaviour.

From memory, the US President, before he came to office, made part of his campaign slogan that he would force US companies to repatriate their profits and he singled out, targeted, fingered and named Ireland when he did so. Has that changed? Are we out of danger in that regard or is the pressure there still?

As a subsidiary to that, I note IDA Ireland is out there this week. Mr. Barry O'Leary went out immediately when this little episode broke. Would the Minister of State tell us whether the pressure from Europe to increase our corporate tax rate, which was so strong when the Taoiseach came to office and which the Taoiseach appears to have put off so successfully, is increasing again?

On the latter issue first, of course, Deputy Ross is correct. When we came into government, it was then French President Sarkozy who was raising this issue on a fairly persistent basis that Ireland should do something on its corporate tax rate if it wanted to close the gap between tax and expenditure. Mr. Sarkozy is no longer there and our corporate tax rate remains. We are in agreement with the French Government and others who believe it is important to have a competitive approach to taxation policy. That issue is not one that is regularly brought to our attention. Other countries will attempt to move on other issues, for instance, the financial transaction tax, FTT, on which a number of countries are moving, although whether they are moving all at the same time is an issue which I would be interested to debate with them at some point.

On the first issue, Deputy Ross is also correct in stating that President Obama, before he was elected five years ago, raised this issue. It did not seem to be an enormous priority in the first term. I suspect in the second term, because of the deficit position in the United States, he will take action to see how much profit can be repatriated. The issue was about the repatriation of profits, but that can be resolved in the United States. It can be resolved in an agreement between, presumably, the US Administration and Congress. Whether that agreement is to be forged is a matter of US domestic politics on which I am not able to comment, but in so far as the bilateral discussions between the US Administration and the Irish Government are concerned on this issue of the corporate tax rate or the repatriation of profits, it is a global issue for the United States. It is not specific to Ireland. That is the point I am raising. We can get too far ahead of ourselves on this, give too much attention to two members of Congress for their interesting observations and assume that such is the automatic view of the US Administration. That would be a dangerous presumption to make