Item No. 2 concerns the EU's response to the debt crisis: the EU/IMF aid package to Greece and the Commission's communication on reinforcing economic policy co-ordination. Apropos that subject, the Ceann Comhairle was aggrieved by my attitude when I asked a question in the House on Thursday.
EU’s Response to Debt Crisis: Discussion
Was he aggrieved or agreeable?
He remonstrated at my persistence. Let us put it that way.
He was aggrieved.
Understandably so. The issue was raised in the House as to the degree to which the national Parliament was aware of the substance of the agreements entered into and the conditions under which the rescue package was entered into. Last Wednesday, we asked for a briefing for the Committee on European Affairs from the Department of Finance. We received the briefing from the Department of Finance on Friday.
Oral or written?
Both.
Is it included in the booklet we have been given today?
It was sent by e-mail. A hard copy was put in members' pigeon holes yesterday.
In all honesty, what purpose is served by having a briefing on a Friday?
The only reason is that I was anxious——
I know the Chairman brought it up on Wednesday. If we had known before then, we could have made it. We had all made other arrangements for Friday.
That is true.
I thought it was nonsensical.
My instructions to the secretariat were to contact all members to see whether they could make themselves available for the earliest possible briefing from departmental officials. The officials made themselves available at short notice. We had a choice between taking the briefing as it came at that time or waiting until a later date.
Could they not come in today?
We had two options. I decided it was important, in light of the speed with which this situation can change — it has changed in the meantime — for those members of the committee who were in a position to make themselves available to get the briefing as early as possible. That is what happened.
When I was contacted by the secretariat, I made it clear that it was impossible for me to attend on Friday afternoon, particularly at such short notice.
Yes.
Who is serving whom? We are the elected representatives. The Department of Finance should show us the courtesy of making officials available to brief members of this committee at a time that is suitable and convenient for us. I do not know who was at the briefing on Friday. I could not make it. I am gleaning from other members that most of them did not make it either. What was the purpose of having last Friday afternoon's briefing, which members were not in a position to attend?
The Chair often has to make a decision in such circumstances. The officials who made themselves available were working within severe time constraints. They had a small window in which to brief the committee. I had to make a judgment on whether to avail of a briefing at 3.30 p.m. on Friday, or not to do so. Those were the options. If we had not availed of the briefing that was offered, and if events had progressed in a certain fashion over the weekend, people would have asked with hindsight why the committee did not avail of the briefing. I think my decision to avail of the briefing was the right one. The officials in question were under extreme pressure. Some of them were on their way to join others who had already gone to an ECOFIN meeting in Brussels.
How many members attended the briefing?
They had to prepare for that. It must be borne in mind that the Euro Area Loan Facility Bill 2010, which is being considered by the Dáil today, was being prepared and published at that time. It was probably better to have the briefing, even though just four or five members were available. The various parties and the Independents were all represented at it.
All the parties turned up.
They did.
Who turned up from Fianna Fáil?
Senator Terry Leyden.
Is he not brilliant?
He was brilliant at the meeting as well.
While the circumstances were not ideal, I think the briefing was a step in the right direction. Half a loaf is better than no bread. I hope it sets a precedent for us to get timely briefings when issues like this arise. I was glad to get the e-mail briefing on it.
I do not want to criticise the Chairman or the secretariat for providing last Friday's briefing. Regardless of when it was provided, it was a good service to this committee. I understand the problems that people from rural areas, in particular, might have on a Friday. I want to make a general point that should be noted. I emphasise that it is not intended to be critical of anybody. As far as I know, this issue was not substantially scrutinised by the Oireachtas — this committee or the Joint Committee on European Scrutiny — in advance of the Heads of State meeting of 7 May last or the ECOFIN meeting of 9 May last. If I am wrong in that regard I ask the Chairman to tell me, but I do not think I am.
The Deputy is right.
That is a significant failing of the system. Even though everything was happening quickly, there should have been some advance discussion by the Oireachtas of this monumentally important series of meetings. The Chairman will agree that this type of crisis handling, involving the establishment of an entirely new loan structure with consequent implications for the way national governments run their budgets and deficits, was of extreme importance. I emphasise that I am not being critical. We have to take note for the future. The Chairman will be aware that I was one of the first to contact his office about this matter, approximately 10 days ago. The secretariat endeavoured to get the Minister of Finance to come before this committee, but he was unable to do so because he was extremely busy. I fully understand and support that. Perhaps a senior official from the Department of Finance should have attended a public hearing of this forum. The Minister of State at the Department of Finance could have briefed this committee. The first point I want to make is that these items were not scrutinised by the Oireachtas in any shape or form before these historically important meetings.
The second point I want to make is that it is clear from the briefing and the legislation that the new loan package for Greece, and any other country in Europe that gets into trouble, will have profound consequences for the budgetary strategies of Ireland and every other eurozone member. As I understand it, if a country's deficit goes over 60%, the advanced deficit warning mechanism will kick in and all sorts of penalties may apply. That means there is now a limit on national borrowing. I do not recall exactly what our deficit is at present, but in the next year or two it will be well over 60%. This penalty mechanism will kick in for Ireland. We need to start having public hearings on this matter with civil society. It has implications for everybody in Ireland, including the entire public sector and the various civil society groups. As I understand it, this is a whole new ball game. We will not be allowed to run deficits of 123%, or very large national debts.
Should we be allowed to do so? Should any country in the eurozone be allowed to do so?
Not in a monetary union. It is as simple as that.
The horse has left the stable.
Yes.
The point I am making is that the decision has been made. We will either sign up to it, or we will not. Given that we did not have scrutiny before the event, at this stage we should consult the various groups that make up civic society about the implications for Ireland of this monumental change.
The Deputy is quite right to say he was in touch with my office. I was aware of the situation. This committee's particular area is policy. The other committee is responsible for scrutiny. They scrutinise and we assess the situation from a policy point of view. I would like to mention briefly that in a different capacity, I attended a meeting in Brussels yesterday week which was attended by President Barroso and the President of the Council. They gave us a rundown of what had happened the previous night. They had just come from the meeting at which everything was decided. We have to remember that developments take place quickly in the international financial markets. Trends are adopted very quickly — all kinds of things like scares and runs happen in a rapid sequence. An effort was made to protect the eurozone countries. It was identified and pointed out that some countries had failed to observe good practice. A presentation was made that set out the degree to which some countries had exceeded good guidance and best practice over a period of time. The question automatically follows — and this is where the argument took place in the House last week — as to whether or not any member state is being jeopardised by the foolhardiness of another. In such a situation, the eurozone countries as a group must feel they are protected by the integrity of the group in which they reside. If any member of that group departs from good practice, the whole association is endangered. It was explained in great detail, but it would have been beneficial if we had a briefing from the relevant officials before the debate took place. Members know the purpose of the exercise, however. It was a rapidly convened meeting to deal with a serious situation which needed to be addressed. We must remember that if any country was squeezed out of the eurozone that would immediately create a pecking order whereby the next in line, and so on, become potential victims. It would not have been to the advantage of anybody to delay the procedure, so something had to be done quickly. The question then arose as to whether or not it was in accordance with existing practice. Of course, members have the right to say they need to know about this beforehand. It also follows, however, that measures needed to be taken urgently to ensure the stability of the eurozone. We saw what happened over the weekend with fluctuations when Asian financial markets opened. That can have serious consequences.
A notion seems to be developing whereby we will not go along with the rest or that we can opt out on whatever basis.
That is the position of the Chairman's own party.
Not necessarily. There is a notion in society generally that the obvious thing to do is to show how brave we are and let us opt out from the rest.
I saw a debate with Deputy Richard Bruton earlier.
Just let me finish. My advice is that we cannot afford to be seen to opt out of anything. Neither can any other member state within the eurozone be seen to opt out at this particular time, or to be in any way reticent.
I endorse what colleagues have said about the briefing. I would have preferred if it was today because the debate is taking place tonight. We are moving into this debate over the next two days and I think it would be better if the briefing was today. Regretfully, I could not be there, but it is better to have a briefing than not. We are expecting too much, however. When we examine this situation in the broader perspective, we can see that there was an international crisis. Predators were playing games with international currencies, including the euro. The eurozone Heads of State had to meet in emergency session at short notice on Friday, 7 May. They requested their Ministers for finance to meet on Europe Day, Sunday, 9 May, to deal with this situation. We must salute our Taoiseach and Minister for Finance, as well as their advisers and officials, on the work they did. Can we imagine the prospect for this island if we, as a nation, were trying to defend our own currency in the international crisis that has bedevilled the world for the past two years, including the pressure on the euro for the past two weeks? On that basis, we must salute their decision, as well as the capacity eurozone members had to stabilise and protect the currency. They did a great job. We could not expect a briefing in advance because it could have destroyed that which was unravelling in front of our eyes.
I want to confirm that I did hear from a member of the secretariat, who kindly telephoned me. I said I could not come on the Friday, however, because I had made plans for that date. When Mr. John Bruton was here he mildly upbraided us if we cast any doubts on the need for us to be European. He said we should be good Europeans and au fait with what Greece was doing. I was taking part in a debate the next day with Deputy Richard Bruton who said it was a disgrace, and that we should not be doing what Europe wanted. Mr. John Bruton said one thing, while the next morning Deputy Richard Bruton said quite the opposite. He went into a spiel of insults about those who wanted to follow the European line. Where does Fine Gael stand? It should grow up.
I always remind members not to be overly political in this forum.
I am sorry, Chairman. I did not think I was.
I forgot to give that citation at the very beginning. I call on Deputy Timmins, and the same citation will apply to him as well, otherwise we will not get out of here at all today.
I broadly agree with the contributions of most speakers, with the exception of Deputy O'Rourke's, obviously. We appreciate that the agenda for Council meetings can change rapidly, and that Council meetings can be called at short notice depending on the emergency involved. The point identified by Deputy Mulcahy is at the core of the disconnect between parliaments, including the Oireachtas, and the citizens of Europe. That is something of our own making and it shows the limitations on the power of the Oireachtas versus the power of the Executive. The Executive holds all the power in this country, while the Oireachtas has very little. That very issue has informed Fine Gael's submission to the committee currently chaired by Deputy Creighton, which is examining the role of the Oireachtas in future, including an onus on Ministers to appear before the Sub-Committee on European Scrutiny before decisions are made. It includes the concept of having a European day once a month in Parliament.
I am sorry Deputy O'Rourke has gone because I wanted to allude to her point. On numerous occasions in recent months, when the Taoiseach returned from Council meetings, we have clearly stated that there should be an obligation on him to appear before the meeting, in so far as he can, to outline what will arise at it. We are being presented with a fait accompli in getting the basic information, but without having any input.
Having spoken to Deputy Richard Bruton and listened to what he said, I know that his comments have been misinterpreted.
Not on corporation tax.
In recent years he has spoken about the fact that the Oireachtas has no input on the budget, which is a shortcoming.
He did not say that.
If we had an input into it, Deputy Byrne and others might not have been out railing against the medical card for the over-70s. People with astute political brains would have had an input beforehand that could have headed that policy decision off at the pass. It was in that context that Deputy Bruton said we need to have discussions on our own budget. There was concern following the study paper from the Commission that the Government was going to come back with a fait accompli, having shown it to the Commission. There should be an input from the Oireachtas. Fine Gael agrees that when one has a monetary policy, one must also have political and economic oversight. There needs to be cohesion and an input at European level into the fiscal policies of all member states in the eurozone. It makes eminent sense to do so. It is something we would be very supportive of.
On a point of order, what is the purpose of the agenda today? What are we supposed to be doing?
We are alerting members because the debate will take place in the House later on today. In addition, there are ongoing discussions within the eurozone to cater for the situation.
Are we to discuss it among ourselves or is someone going to speak to us about it?
That is the next thing. At the end of this discussion I will look for someone from the Commission to brief the committee and the Department of Finance at a time and date suitable to everyone.
Regarding today's agenda, should we expect someone to come in to speak to us today?
Not today.
We have a briefing on the Commission's document and that may be useful——
My apologies, Deputy Creighton had indicated beforehand.
I will not take too long. I thank Mr. Ronan Gargan of the secretariat for the briefing material provided to us. I am sorry I could not attend the briefing on Friday. Perhaps some Department of Finance officials will appear before the committee at some point as that would be a useful exercise.
At times of crisis, opportunities arise and I have long held the view that the monetary union and the single currency is not sustainable without member states stepping up to the plate and taking risks, doing things that may not be popular at domestic level but are in the common interest. I agree with Deputy Treacy that we are a small island state, which is a well-rehearsed argument for those who have campaigned for various European treaties. Member states have tried, in a contradictory fashion, to hold on to the nebulous concept of sovereignty in respect of fiscal policy while at the same time trying to be part of the monetary union. It was inevitable it would blow up in our faces. The various procedures and soft powers, such as the excessive deficit procedure, are not and cannot be effective. Imposing fines on member states after the event is no way to run the monetary union or the single currency. The opportunity that presents itself is to develop closer fiscal co-ordination between member states and I welcome this. We need to see opportunities that arise and ensure the correct procedures are put in place.
There has been a breakdown in communication to some extent. I see Deputy Thomas Byrne smirking at me but I am genuine about this point. There is disappointment on both sides of the House that there has not been an opportunity to frame the new regulations. That is lamentable.
What regulations?
Only one speaker.
I refer to the new procedures for closer fiscal co-operation between member states. I agree with Deputy Billy Timmins that we must have greater accountability from Ministers before and after Council meetings. The circumstances are not ideal in respect of what happened in the past ten days and this has not allowed for a great amount of debate in the Houses of the Oireachtas. We must demand that these debates happen in advance of Council meetings and not after the fact. This is particularly true where momentous decisions are being taken and changes are happening for the right reasons. In future we must demand accountability in the Houses. This is the national Parliament and while some would like to see it watered down further, with the Executive wielding even more power, that is not the way forward.
The discussions we are having in the Joint Sub-Committee on the Review of the Role of the Oireachtas in European Affairs and every witness before it point to the same conclusion — that the role of the Oireachtas must be strengthened and enhanced. We have all paid lip-service to this but it is up to this committee to demand that it happens. We cannot speak out of both sides of our mouths, suggesting we want greater accountability and a greater role for the Oireachtas but allowing the Government to do what it wants without answering to anyone or appearing before any committee. It is not acceptable that officials from the Department of Finance decide when they are available to brief this committee. They should be made come before this committee at a time convenient and appropriate to members of the committee.
I welcome tighter budgetary co-ordination between member states. This is important to the future of the currency, the monetary union and the future of the European Union.
That should not be confused with tax harmonisation, which is a different subject. Adherence to the Stability and Growth Pact, which a number of countries avoided for their own reasons, is a different subject to tax harmonisation. We debated this at great length during the Lisbon treaty and there is no doubt in the minds of our European colleagues what this means. If one country within the eurozone decides to ignore the Stability and Growth Pact, there is danger for all eurozone countries. Officials from the Department made themselves available when I demanded that they become available at the earliest possible opportunity. They did so at great expense, sacrifice and discomfort to themselves. They had to race from that meeting to another meeting.
There will be occasions when members of the committee may have to come together at short notice. On previous occasions, this committee had to meet on Sunday at short notice. That happens from time to time and if the urgency of the situation demands it, the committee must be in a position to respond. That is the nature of this committee and I have pointed that out on many occasions.
I agree with the Chairman on the last point. I thank the officials, the advisers and the clerk on their efforts. I was not available at short notice last Friday but I do not criticise the staff of the committee. The comments of the Chairman and Deputy Lucinda Creighton are extraordinary in that they contradict the position of the Fine Gael party leader and Deputy Richard Bruton. That is welcome because Deputy Kenny——
I just want to point out——
Mise ag caint.
Deputy Byrne should not presume anything.
I have been listening to the Chairman.
I pointed out very clearly that adherence to the principles of the Stability and Growth Pact, which a number of countries avoided for reasons best known to themselves, is distinct from tax harmonisation. That is a different question.
Unfortunately, the Chairman's party leader came into the Dáil Éireann last Thursday ——
That is my party's policy. I am not here in this capacity.
—— and deliberately confused the communication about tax harmonisation and corporation tax. That was a retrograde step for an Opposition party in terms of the European debate. The next day people were ringing up my local radio station saying that we had lied to them in the debate on the Lisbon treaty. They thought there was a cast-iron guarantee, which we have. It is welcome that there is an implicit criticism coming from this committee of the Leader of the Opposition. The Leader of the Opposition cannot just jump on any bandwagon and say anything that people will believe.
I told several people earlier to observe the rule that we refrain from the utilisation of too much politics on this committee.
This committee has spent so much time trying to get facts, figures and correct information across in respect of Europe when we always had misinformation. We had another example of that last week. The legislative process of the European Union is not understood by either much of the population or the leadership of Fine Gael. We should reflect on this document, as suggested by Deputy Lucinda Creighton, and discuss it. If Deputies Bruton or Kenny had bothered reading page 3 of the document they would have noticed the sentence that "these are ambitious and necessary ideas on which the Commission is seeking the views of Member States, the European Parliament and stakeholders". I hope this committee will give its considered views on the document to the Commission when we have read it in depth and discussed it, not expressing the kind of euroscepticism that one constituent described as reminding him of Mr. Norman Tebbit in the 1980s. Deputy Kenny's allegation about corporation tax was deeply unhelpful. This committee, under the leadership of the Chairman and the Fine Gael spokesperson on European affairs, has an important role to play in correcting the debate and leading it. Perhaps there will be concerns about this document but they will not be about corporation tax. This committee can put forward concerns after a proper discussion.
I endorse what colleagues have said, particularly Deputy Creighton. People should not be under the misapprehension that it is possible to brief a committee of the Parliament in advance of a final decision being taken by Heads of State at European level. In modern times of instant communication, we cannot provide a briefing on Wednesday or Thursday before a meeting of Heads of State or an ECOFIN meeting and give a line that could distort markets, confuse colleagues and unravel the cohesion of solidarity in the European Union. We must be mindful of that in our discussions.
This is an important point. I would encourage Deputy Treacy to attend the meetings of the sub-committee, as he is entitled to do. His comments are at odds with those of every witness who has appeared before the committee and with what happens at virtually every other——
I am not a member of the sub-committee.
Deputy Treacy is entitled to attend as a Member of the Houses of the Oireachtas. His comments are at odds with standard practice in most national parliaments in the European Union.
I will not prolong the debate but we must remember the sub-committee is dealing with issues relevant to the attitude and the procedures to be followed in the future and how best to augment them. This committee deals with the situation as it is now. In times gone by, this committee handled the entire situation in a similar fashion and was adept at identifying the issues. The Greek rescue package is done. In ensuring financial stability, the Commission produced a communication on reinforcing economic policy co-ordination, which has been the subject of much media debate. That is the context in which we are having this debate. It would be a good idea if senior officials from the Department of Finance and a senior official from the Commission could appear before the committee at the earliest opportunity. I am happy to pursue that and the issue warrants attention from the committee for the reasons set out by committee members, including the need for transparency and the need for information relevant to the nature of the issue and issues likely to emerge. We can seek a briefing in public or in private from senior officials in the Department of Finance and senior representatives from the Commission. Is that agreed? Agreed.
The joint committee went into private session at 3.35 p.m. and adjourned at 4 p.m. until 2 p.m. on Tuesday, 25 May 2010.