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Leaders' Questions (Continued)

Tuesday, 7 May 2013

Dáil Éireann Debate
Vol. 802 No. 1

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(Speaker Continuing)

[Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin] This is having a detrimental impact on the capacity of countries across Europe to recover. Does the Taoiseach believe there should be a radical rethink of the economic model Europe is pursuing now and that there is a need for radical economics across the European Union to prevent the divisions that are occurring?

Deputy Finian McGrath: Information on Finian McGrath Zoom on Finian McGrath The Deputy sounded like Michael D. He should just keep within the Constitution.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny On Deputy Martin's comment that Europe is not emerging from the crisis that has befallen it and that it is falling deeper into recession, he knows something about this from his past experience and what did not happen that might have happened. It is fair to say that around the European Council table very different views are expressed by different Prime Ministers, some elected in different circumstances beholden to a party or a number of parties in minority situations. Many of them are not in a position to give agreement to particular programmes or proposals in that they might not be able to get them through their parliaments.

It is necessary for Europe to follow through on the decision that it makes. We can have all the economic arguments, theories and projections that people like and they might be great fun for economists and those who pursue economic theories, but the problem facing the politician is to make decisions that impact on his or her economies for their betterment and that will lead to job creation and growth. For instance, it is true to say that decisions taken by the European Council in respect of the development of the European Union, both in the eurozone and in the Union, have not been followed through in a number of cases, but many of these are very complex. We discussed previously the question of the setting up of the euro while not having the facilities in place to develop it afterwards and develop the Union as people might have imagined. That is why, for instance, the question of a banking union is now one that is central to the argument that we need this facility to deal with a fundamental crisis issue in Europe, namely, that surrounding the banks and their operations. That is why the single supervisory mechanism has now been agreed in terms of its architecture to take effect next March. That is why the next stage of banking union is bank resolution and that matter is under discussion at the Eurogroup and ECOFIN. The third element of that is a euro-wide guarantee in respect of deposits. That is a complex and technical series of arguments that is being followed through. We would like to see it happen much quicker in the interests of everybody but that is not practically possible. Nor will it happen that we will have a broad range of radical rethinking of where Europe stands now. It is very necessary that European leadership follows through on the decisions it has made and demonstrates to the peoples of the European Union that there is a follow through on decisions made in their interests. As a matter of course, we should follow through on these decisions and not just talk about some alternatives. They come up at every meeting but I think leadership demonstrates to people that Europe is serious about its business - I said that again last night when I along with the Tánaiste got progress on Europe's discussions on the MFF and the deficit for 2012-13 - as opposed to having endless, and I mean endless, arguments about different economic theories that may or may not be relevant. For now Europe has made its decisions and it should follow through on those, and any new policy should be additional to the decisions that have already been made.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin The problem is that those policies are not working across Europe. That is the point. They are simply not working. Millions of people across Europe are unemployed and the levels of unemployment across the main European economies are unprecedented. Commentators from the IMF, Paul Krugman, the economist, and other distinguished statespeople have identified part of the problem as simply being that Europe has followed but one model, which essentially is that fiscal consolidation is the route to economic growth across Europe and nothing else, but that it is not working and will not work. When I asked the Taoiseach did he believe there should be a radical rethink, I was not talking about abstract economic theories or anything like that. Clearly, he does not believe there is a need for a radical rethink, rather he believes that existing decisions should simply be followed through on. I put to him that the budget that was just under discussion will for the first time represent a cut at a time when Europe needed some sort of stimulus. The European leaders came together and conspired to cut the European budget, which already is about 1% of GNP across Europe. That made no sense.

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett Thank you, Deputy.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin The agricultural budget is being cut by 10% for the first time in the lifetime of the Common Agricultural Policy. That money cut from that budget would have put funding into rural economies and the wider economy. The youth employment guarantee fund represents about €122 per unemployed young person across Europe. It is not a question of abstract economic theories that people are spinning out. The leaders of Europe should listen to what is being said by fairly informed people in terms of the direction that Europe is taking and the mistakes it has made and continues to make. It is not only one particular model that should be pursued to the exclusion of all other ideas. That is the key point I put to the Taoiseach.

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett Thank you, Deputy.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin The budget has been cut, the banking union has been delayed and downscaled from what was originally envisaged and there will be no discussions on reforms until the end of next year. I do not get any sense of leadership emerging from Europe. In particular, I believe there needs to be a radical rethink of where Europe is going and how it is going about coming out of this crisis. I ask the Taoiseach to give that serious consideration.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny The Deputy is perfectly entitled to have that viewpoint. I think many people would share his viewpoint that we have to have additional proposals and indicators of what might be helpful to what is happening here. It is true to say that to have 26 million people unemployed in the European Union is astonishing and completely unacceptable. I spoke to the Portuguese Prime Minister when in Portugal last week and I also spoke to the Prime Minister of Spain. Some 54% of young people are unemployed, there is no capacity for social welfare after two years, 600,000 people in Portugal are in serious difficulties, with 200,000 house repossessions in Spain. These figures spell out the scale of the challenges those countries face. France is facing a challenging time, Italy has a new government and there are problems in Cyprus and Greece. Of all of these countries, serious decisions were made in Ireland to adjust our programme to deal with our circumstances. Clearly, we are not in a position to borrow any more money. We have made the point as a matter of European policy, and I agree with the IMF on this, that countries that can borrow further moneys should borrow further moneys because that would be good for Irish exports, Irish jobs and jobs in general. I agree that we should strongly pursue the mandate for discussions on free trade between the European Union and the US which, we are told, has a capacity for at least 2 million extra jobs and a potential to grow economies by 2% or 3%. The Deputy knows this. When we sat down with the President of the Commission and the President of the Parliament within two hours we at least got movement on dealing with the deficit for 2012-13 and on the structure and timescale for the multi-annual financial framework or the budget for 2014-20, which includes a €6 billion fund for unemployment and serious moneys for cohesion. The budget was reduced by a decision of the European Council leaders but it was not reduced by anything as much as what some countries were proposing.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin It should have been expanded at this time when we are in a recession.

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