Joe Higgins
Ceist:6Deputy Joe Higgins asked the Taoiseach the number of occasions that the Economic Management Council has met since the Christmas recess. [12200/12]
Amharc ar fhreagraTuesday, 22 May 2012
Ceisteanna (28, 29, 30, 31, 32, 33, 34)
Gerry Adams
Ceist:7Deputy Gerry Adams asked the Taoiseach the number of times the Economic Management Council has met since the Easter recess. [21609/12]
Amharc ar fhreagraGerry Adams
Ceist:8Deputy Gerry Adams asked the Taoiseach if the Economic Management Council has met with the Irish banks since the Easter recess. [21610/12]
Amharc ar fhreagraGerry Adams
Ceist:9Deputy Gerry Adams asked the Taoiseach if the Economic Management Council has any plans to meet with the Irish banks. [21611/12]
Amharc ar fhreagra
Micheál Martin
Ceist:10Deputy Micheál Martin asked the Taoiseach if he will report on any recent changes to the supports in place within his Department for the Economic Management Council. [23875/12]
Amharc ar fhreagraMicheál Martin
Ceist:11Deputy Micheál Martin asked the Taoiseach if he has reviewed the membership of the Economic Management Council. [23876/12]
Amharc ar fhreagraMicheál Martin
Ceist:12Deputy Micheál Martin asked the Taoiseach if he will report on the number of meetings of the Economic Management Council. [23878/12]
Amharc ar fhreagraFreagraí ó Béal (123 píosaí cainte)
I propose to take Questions Nos. 6 to 12, inclusive, together.
The Economic Management Council has met 55 times since its establishment. The members met 18 times so far this year, most recently on 16 May and five times since the Easter recess. The Government intends to work closely with the Irish banks to ensure that the banking sector supports economic recovery. The members of the council last met with the banks on 21 February. As part of this ongoing process, I expect that members of the Economic Management Council will meet with the banks again in the not too distant future.
The membership of the Economic Management Council consists of the Taoiseach, the Tánaiste, the Minister for Finance and the Minister for Public Expenditure and Reform. The support for the Economic Management Council is a core function of my Department and is undertaken in addition to other responsibilities of the staff involved, with assistance from other Departments, as may be appropriate.
I read in a briefing note that the function of the Economic Management Council is to manage the Government's programme in respect of economic planning and budgetary matters, economic recovery programmes, including the representation of Ireland in negotiations with the European Union, the IMF and the European Central Bank, and that additional support for the council is provided from within the existing resources of the Taoiseach's Department, working in close conjunction with staff from the Departments of Finance, Public Expenditure and Reform and Foreign Affairs and Trade. In view of that mandate for the Economic Management Council and of the fact that it has met 18 times this year, is it not incredible that the Irish people are not getting a single assessment from the Taoiseach of the economic impact of the fiscal rules straitjacket he agreed in Brussels at the summit of European leaders in December? In the course of the hundreds of hours of media debate and discussion, and the Taoiseach's side allegedly putting out information, we have had no idea of the fiscal impact of the new fiscal rules the Taoiseach proposes to enshrine in Irish law and to agree by treaty. Will the Taoiseach explain why this is the case? Is it not really shameful that instead of an honest attempt to lay out the implications of the permanent austerity rules the Taoiseach seeks to frighten our people? Will he correct this urgently so in the coming week the Irish people can have as objective information as possible, based on the projections of the Department of Finance and others, on how the new fiscal rules would impact on the economy from 2015?
I do not accept Deputy Higgins's assertion. He knows very well what the fiscal impact will be because the treaty states it quite clearly. A "Yes" vote guarantees access to the ESM. A "No" vote guarantees no access to the ESM. Deputy Higgins does not have to take my word for it; I am quite sure he respects Mr. Justice Feeney and the other members of the independent Referendum Commission who are absolutely impartial, apolitical and utterly focused on telling the people the reality and the truth about what will be the fiscal impact here. Deputy Higgins does not have to accept my word for it. I am quite sure he will not deny accuracy and truth to the chairman of the independent Referendum Commission. The commission has made it perfectly clear a "Yes" vote would guarantee access to the ESM if it were ever required.
It is equally clear that much of what is in the fiscal stability treaty has already been enshrined in European Union legislation be it through the six pack measures or the Stability and Growth Pact. The difference will be that everybody will have to adhere to these conditions, big countries as well as small countries. The Deputy will appreciate that in the past big countries broke the Stability and Growth Pact and did not suffer any consequences. The new situation will bring good housekeeping to the fore which will ensure no future Irish Government or collection of parties will ever again be able to run away with the people's money.
Several weeks ago Deputy Higgins and those who support his call for a "No" vote called for the vetoing of the ESM and Sinn Féin was stating the IMF and the EU should take their money, get out of here and leave us alone. Now they state that of course on the day we will have access to all of these funds but with no indication of what the fiscal impact might be. In other words, when Deputy Higgins states the treaty leaves us with an austerity programme, I would like to know what is his view of the interest rate one would pay if one was to follow his proposal.
His question is about the fiscal impact. The fiscal impact is that the country will have access to the ESM if ever it requires it. More important are the jobs I discussed earlier with Deputy Martin from the multinational investors which are very clear, decisive, deliberate and large. Each of them reduces the deficit by €20,000. These matters speak for themselves. They have confidence in our people and country because of our tax record, technology and talent pool. We want this to continue. We might not win all of the jobs, but a "Yes" vote guarantees significant interest in investing in our country will continue. A "Yes" vote guarantees access to the insurance of the permanent fund for all European countries were it ever to be required. It also allows us to apply good housekeeping rules here. Deputy Higgins is well aware the less interest one pays and the less in debt one is, the more one has to spend on important facilities such as schools, primary care centres and front line services because the money is not required to be paid on high interest rates because of decisions taken in the past. This is the situation.
There the Taoiseach is, leading us on another wild goose chase employing diversionary tactics to answer the nub of the question I put to him. Perhaps I will have better success the second time. The Taoiseach is absolutely wrong that a country which does not sign the austerity pact will not have access to the ESM.
It is not an austerity pact.
Is the Referendum Commission wrong?
Read the treaty.
If the Irish people vote "No", it is a mandate to the Taoiseach to ensure he removes any doubt there might be. I can go into the details of the ESM treaty itself.
I would prefer if you did not.
Please do not.
I can go into other matters with the Taoiseach.
The Deputy's question is on the number of times the Economic Management Council has met since Christmas.
The Taoiseach will not find any magic bullet in what he is looking at there. The nub of the question is that the 0.5% structural deficit is new.
We are not having a debate on the stability pact. We are asking questions to the Taoiseach.
Yes, but the fiscal targets and the automatic debt reduction are new.
That is not your question. You asked a question about the Economic Management Council.
I asked the Taoiseach why the economic council has not laid in front of the Irish people what would be the impact in 2015 and beyond of the implementation of these new facets, namely, the €5 billion to €6 billion in cuts or tax increases or a combination the structural deficit will involve and the €4 billion to €5 billion of the automatic debt reduction.
Does the Taoiseach not accept it is utterly fraudulent for him and the Labour Party, with all their posters promising us stability in the same way they promised us jobs in the second Lisbon treaty campaign-----
What is certain is that there will be no stability if we follow Deputy Higgins's course.
Does the Taoiseach agree he has no control over those who will decide whether there is stability, namely, the financial markets? The Taoiseach signing a bit of paper committing our people to further austerity will not satisfy their thirst for more and more of the lifeblood of the resources of people in the form of profits if they fear their funds are at risk. The Taoiseach is making a fraudulent claim when he promises stability.
Deputy Higgins will give us the ball and chain.
I am disappointed in Deputy Higgins. He has been here for quite a considerable time and he also has some experience of Europe. He went out there for a little rest before he came back to proclaim his new method of driving our country.
It is not new. In fairness, Deputy Higgins has been very consistent.
I am disappointed he should decide that Mr. Justice Feeney, the chairman of the independent Referendum Commission, is not in a position to be accurate with his facts.
Deputies
Hear, hear.
This is very disappointing because the people of the country, if they do nothing else, have absolute respect for the impartiality, independence, accuracy and truth of the statements made by Mr. Justice Feeney as chairman of the independent Referendum Commission. Deputy Higgins should withdraw his assertion that the commission is not being accurate or truthful in its comments.
Hear, hear.
No, he is right that you signed it.
If he reads the stability treaty, and I know from the past that he is a good reader, he will see it states on page 9:
STRESSING the importance of the Treaty establishing the European Stability Mechanism as an element of a global strategy to strengthen the Economic and Monetary Union and POINTING OUT that the granting of assistance in the framework of new programmes under the European Stability Mechanism will be conditional, as of 1 March 2013, on the ratification of this Treaty by the Contracting Party concerned and, as soon as the transposition period mentioned in Article 3(2) has expired, on compliance with the requirements of this Article,...
It is perfectly clear, as the chairman of the independent referendum commission has pointed out, that only those countries that ratify this fiscal stability treaty will have access to the ESM. It is difficult to predict accurately what the scale and nature of each individual country's plan will be to get down to 60% and 0.5% starting after 2019 because the growth figures that will be driven from this country will have a dramatic impact on the scale of that. We had this previously. I regard it as reprehensible for Deputy Higgins to stand up in this House as an elected representative and condemn the chairman of the independent Referendum Commission and accuse him of being inaccurate in his statements to the public.
Hear, hear. Deputy Higgins should apologise.
May I just make one point, please?
I call Deputy McDonald. Deputy Higgins had one question on this matter.
May I just finish the point, a Cheann Comhairle?
Deputy McDonald, on behalf of Sinn Féin, has three questions, as does Deputy Martin.
The judge said that the Taoiseach signed off on it.
I ask the Deputy to resume his seat.
He did not go on to say that the Government could change that-----
I call Deputy McDonald.
I am struck-----
This is not about the stability pact. The questions tabled to the Taoiseach deal with the Economic Management Council.
I am struck by the Taoiseach's faux indignation and his concern that Deputy Higgins is condemning the independent chairperson.
We will not have that either.
That is just nonsense.
Sinn Féin does faux indignation very well.
In an effort to be helpful, may I make the following suggestion to our colleagues on the Government benches and to the Taoiseach in particular? He is obviously very concerned to debate the matters contained within the austerity treaty.
It is not austerity - there is no austerity there.
Can I suggest to him-----
Perhaps the Deputy should table parliamentary questions on it.
-----that rather than detaining this session with a discussion on it-----
It would be helpful if the Deputy tabled parliamentary questions on this particular issue.
-----he should make himself available outside this House for a debate with Deputy Adams, the leader of the "No" campaign. That would be useful.
I ask the Deputy to ask her supplementary question. Time is running out and Deputy Martin has three questions.
I have made my point.
I thought you were the leader, Mary Lou.
He is one leader of the "No" campaign.
I have made my suggestion to the Taoiseach.
The Taoiseach is running away from debate on this matter.
If he is so utterly horrified by what the Deputy had to say, he should take the discussion outside this House.
Maybe the Deputy was also horrified.
During his meeting with the banks on 21 February, did the Taoiseach raise the issue of mortgage distress and how did they respond? Did he discuss the personal insolvency Bill and did they express a view on it - supportive or otherwise? Was the proposal to move loss-making tracker mortgages from Permanent TSB and other banks into the IBRC, formerly Anglo Irish Bank, discussed by the banks and the Economic Management Council? Were the 2,500 redundancies at Allied Irish Banks discussed with the banks? I understand the IBOA is involved in talks with AIB management today, but I would like to know whether the matter was discussed. What did the Taoiseach have to say and what did representatives of the banks have to say? Was he in any way shocked by or condemnatory of anything members of the banking fraternity may have said to him in the course of his meetings?
Before the Taoiseach replies I wish to put the following on the record. From time to time I have to disallow questions about was discussed at Cabinet sub-committees - it is not in order to ask these questions. As I understand the Economic Management Council is a Cabinet sub-committee, I ask Deputies to be careful about their supplementary questions.
Arising from what Deputy Higgins said, Mr. Justice Feeney's remarks were "one of the sources of funding which Ireland which Ireland is currently availing of will not be available" in the event of a "No" vote.
That was not my question.
I know it was not the Deputy's question.
The Taoiseach should have the debate outside.
I remind her of something she said when she mentioned her leader. She has been very categorical in her accurate misquoting of what the treaty states. Specifically she misquotes Article 12, which states that-----
I did not misquote anything.
-----"the ESM may provide stability support... subject to strict conditionality". There is a big difference between "may" and "will".
That is for the purpose of stability in the eurozone.
Her party leader was very clear in his vocal-----
The Taoiseach should have the debate outside the House.
Sorry, Deputy.
-----assertions that the EU and IMF should get lost and take their money away from here.
And the Taoiseach wants them to stay for a second bailout.
Sinn Féin had also stated that the Government should veto the ESM and now it states that we will avail of the ESM - of course it will be all right on the night and we will get it at low interest rates. Sinn Féin has no idea of the scale of what is involved in that.
No, but the Taoiseach does.
The Taoiseach should read Article 3 then.
I had the privilege to sign this treaty on 2 March. The chairman of the independent Referendum Commission has made it perfectly clear for Deputy Adams and all of his party. All Sinn Féin wants to do is cause as much protest as it can around the country. I meet many of its members in various locations. I have seen some of them on a regular basis and have got to know them very well, and am always guaranteed a noisy and warm reception. I have no problem with peaceful protest which is perfectly legitimate.
The Deputy should come out with him.
The Deputy might tell some of those with whom she might be associated or her leader to-----
Not wear balaclavas.
-----refrain from being over-enthusiastic or over-exuberant. In respect of what the Ceann Comhairle has said, far be it from me to-----
(Interruptions).
Deputies, please.
We were much more organised, Micheál.
You were more secretive.
The Economic Management Council has had a number of meetings with the bank. Any meeting with the bank did not actually constitute, in itself, a Cabinet sub-committee. So I can say to the House and to you, a Cheann Comhairle, that the Government had a series of detailed questions for the banks, which we met collectively and individually. We asked about how the banks are ensuring SME credit targets will be met; practical initiatives to ensure and assist SMEs access credit, which is a big issue and was discussed last week; and willingness to implement and support the Government's action plan for jobs for small business - we got reassurance on a number of those issues. We also asked about mortgage credit; how banks are ensuring that credit is available to support the Government's budget initiative; the checks and balances being put in to ensure that the conditions on mortgage credit are fair and balanced, and not unduly restrictive; whether banks are monitoring outcomes between different regions; the situation that applies in the case of mortgage arrears; and the strategy for each of the banks. We discussed examples of how banks are assisting those in difficulties. We asked about progress in respect of the Keane report; when their teams will be in place to sit down with individuals who are in mortgage distress, negative equity and very concerned about their positions; and when they expect to provide their reports to Mr. Elderfield for consideration of the sectors and the categories involved here.
These are all issues that were discussed with the banks. I assure the Deputy that there was a comprehensive discussion of the financial situation of many people, access to credit, mortgage distress and mortgage arrears. While I am no favourite of the banks, I must say that their plans - if they follow through on them - were very constructive in a number of areas and I would like to see them happen. We need a banking system that has the trust of people and works in the interest of business. From travelling around the country - sometimes meeting some of the Deputy's colleagues - I find that the younger generation working in the banks work exceptionally hard and take the brunt of the stick which was not due to them in the first place because of decisions made higher up. I will be happy to report to the House on a regular basis on the progress being made here.
To clarify, that was one of a number of regular meetings with the banks which, of itself, did not constitute a Cabinet sub-committee. The EMC is such a committee.
Was personal insolvency discussed?
Yes, we outlined the progress made on personal insolvency although obviously we were not in a position to outline all the detail. Banks are clearly well aware of what the Government's intention is here.
When the Economic Management Council was established, the Taoiseach said it would ensure that projections for growth and other matters were fully accurate. He also talked about how items would be reviewed intensively. The Taoiseach placed great store on it. Since then, he has done everything but admit that the growth projections from December were wrong, almost from the moment they were published. This goes to the heart of the credibility of the Economic Management Council. The IMF and the EU downgraded the growth forecasts very early but it took the Government a long time to follow suit.
The Government is now predicting lower growth rates, lower GDP, lower job creation, higher unemployment, lower real wage growth and higher public debt than it was predicting 12 months ago. Some of the variations over the 12 months are significant. The average projected growth of GDP from 2012 to 2015 was 2.9%, but that has been revised down to 2.2%. Projected growth of GNP has been revised down from 2.4% to 1.4%. Average annual investment growth has been revised down from 4% to 1.8% over that period. Nominal GDP has been revised down from €182.7 billion to €178 billion. Net job creation from 2011 to 2015 was projected last year to be 101,000; this April the Government is projecting that it will be 61,000 over that same period. That is a decline of 40,000 jobs in the forecast.
It is more than were created under the last Government.
In April last year the Government was predicting an unemployment rate of 10% in 2015; now it is predicting a rate of 11.7%. That is an increase of 1.7%. The Government is also predicting a reduction in real wage growth of -1.7%.
I hope that is not Bertie texting the Deputy.
On the debt to GDP ratio in 2015, a very serious measure, the Government was predicting last year that it would be 111%; now it is predicting it to be 117%. That is a very significant variation in one year.
There were many variations in the last ten years.
We were told that the Economic Management Council was established to provide accuracy in how things were measured in order to inform policy. How is the EMC managing this area? Is its failure with growth projections due to political decisions or, perhaps, to the lack of adequate technical support? I would appreciate if the Taoiseach would address this.
I am running out of time so can I ask my second question now, a Cheann Comhairle, while I am in full flight?
Yes.
With regard to the membership of the EMC, there was a public dispute recently between the Government parties about who sits on the EMC and what its role is. Labour Party Ministers told journalists that the briefing which the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, made against the Tánaiste some time ago was motivated by jealousy over not attending the EMC. Did the Taoiseach speak to those involved at that time? Ministers regularly complain to journalists that the Cabinet is marginalised on economic issues because of the Economic Management Council. They say that what it does, in essence, is take economic items off the Cabinet agenda without really adding anything extra. Has the Taoiseach examined the membership of the EMC and its relationship with the Cabinet's deliberations on broader economic issues?
I believe the EMC was a minor initiative which was over spun, like many others at the time the Government was formed. It is a small Cabinet committee with little support and, already, a poor record after 12 months in existence in terms of growth projections and so forth. We discussed mortgage arrears earlier. There has been no sense that the EMC has had any effectual impact on the mortgage arrears crisis. We dealt with that earlier in Leaders' Questions. Will the Taoiseach discuss the growth projections and will he comment on the EMC?
I reject all the assertions made by the Deputy.
The Taoiseach cannot do that. They are his projections.
The EMC met 55 times. It has a real work programme. The membership comprises myself, the Tánaiste, the Minister for Finance and the Minister for Public Expenditure and Reform. The council is served by civil and public servants, as is appropriate. I have no interest in allegations or assertions as to who said what in anonymous reports in newspapers. The Ministers attend Cabinet sub-committees as required. As I said to Deputy McDonald, the value of this from my perspective is that once a strategy or pathway is laid out for whatever action or economic matter is being considered, there is a time line included and Ministers and Departments are expected to respond, which they do. The public service responds very well to clarity of requirement or decision and the time in which it must be done.
The growth projections?
Obviously, growth figures are revised on a regular basis. They are not subject to a single individual criterion or condition. External demand is always an issue and it depends on whether other economies are able to purchase exports from this country. Yes, the figure has been revised down to 0.7% for this year and to 2% for next year, which is significantly ahead of both the eurozone and the European Union. The OECD forecasts were published this morning. They project growth of 0.6% for 2012 and a deficit of 8.4%-----
That is less than the Government's revised projection.
They project growth of 2.1% in 2013 and a deficit of 7.5%. The OECD's assessment of the Irish economy is that the recovery under way will gain further momentum, which is to be welcomed.
What about the employment projections?
The OECD is projecting that Ireland's GDP will increase by 0.6% this year, which brings the OECD more into line with the prevailing consensus from the Department of Finance of 0.7% and the EU Commission's projection of 0.5%. IBEC gives a projection of 1%. These are all independent projections.
The Government was projecting 1.7% up to a month ago.
The Irish economy returned to growth in 2011 and I welcome the OECD assessment that the economy will continue to improve and grow for a second consecutive year in 2012. Despite the challenging times, these are very worthy of comment. Next year, the OECD expects a strengthening of activity and is forecasting GDP growth of 2.1%.
Has the Taoiseach any comment on the net job creation figure?
The Deputy is not listening to the answer.
These are the OECD figures for this morning.
I did not ask about the OECD figures. I am asking about the Government's projections.
The Deputy asked about growth projections and I am telling him what they are. I have given the Deputy the growth projections of IBEC, the Commission, the Department of Finance and the OECD.
The Government has reduced by 40,000 the net increase in the number of jobs.
They are all on the plus side-----
They are not.
-----with clear forecasts of projected increases for next year again, in terms of growth in the economy.
The Government is predicting 40,000 fewer jobs than it was predicting five months ago.
What about the number of jobs lost between 2008 and 2011?
Can we have a bit of quiet please?
With regard to jobs, we have a rate of 1,000 job announcements per month from foreign direct investment in this country. The Deputy was very quick out of the blocks with Eli LIlly and Apple when they made their announcements about jobs in Cork.
I have worked with Apple for a long time.
He never questioned their job creation figures in his constituency.
These are the Taoiseach's figures.
Why would he? Of course, they are welcome. I had to drag out of Deputy Adams an acknowledgement of the 1,000 jobs in Dundalk created by PayPal. I would like if these figures were higher and that is the priority of the Government. It is focused both on our indigenous economy of small and medium enterprises and business and on continuing the strong line of investment into this country.
Written Answers follow Adjournment.