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Economic Growth Initiatives (Continued)

Tuesday, 2 July 2013

Dáil Éireann Debate
Vol. 809 No. 2

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  3 o’clock

(Speaker Continuing)

[Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan] Measures to be implemented at national level include the full implementation of the country-specific recommendations from the European semester for those member states included in the process, including the pursuit of differentiated and growth-friendly fiscal consolidation, the restoration of normal lending to the economy and the promotion of competitiveness. At EU level, policies to promote growth include a renewed emphasis on deepening the Single Market and reducing the regulatory burden. In addition, an important measure is the mobilisation of funding to boost European growth. Funds will be made available inter alia via EU Structural Funds and European Investment Bank lending. Considerable progress has been made at euro area level to put the single currency on a more solid footing. For instance, the establishment of the European Stability Mechanism and the ECB's announcement of outright monetary transactions have helped restore confidence, while the enhanced system of governance will have a positive impact on economic activity.

  I now turn to my role as President of the ECOFIN council. As the Deputy will be aware, Ireland has just completed its Presidency of the Council of the European Union. The theme for the Irish Presidency was stability, jobs and growth. In my role as President of the ECOFIN Council for the Irish Presidency I have overseen a number of actions aimed at improving the European economic environment.

  Significant progress was made on the financial services agenda including agreement in Council or with the Parliament on a range of dossiers. Significant progress was made on the banking union agenda with agreement on the single supervisory mechanism and the capital requirements directive, and political agreement at ECOFIN on banking recovery and resolution. There was also significant achievement in other aspects of financial sector regulation including political agreement in the Council on the markets in financial instruments directive and regulation, the market abuse regulation and the transparency directive and agreement on the mortgage credit directive. Agreement was also secured on an amending budget for the European Union. This was a key element in the overall delivery of a political agreement on the multi-annual financial framework between Council and Parliament. There was major progress in the area of taxation with a particular focus on addressing transparency and fraud. The EU economic governance process, the European semester, was successfully managed and agreement achieved on the remaining legislative element of the economic governance process, the two pack.

  Additional information not given on the floor of the House

  In addition to six formal Councils, a very successful informal ECOFIN was held in Dublin which had a focus on growth and SME funding. At the informal ECOFIN Ministers discussed financing options for long-term economic growth on the basis of the Commission's Green Paper on long-term financing which was presented by Commissioner Michel Barnier. A Presidency issues note was also used to guide ministerial discussion on the topic of non-bank financing for growth and jobs. This has led to further work at European level with a report expected in late 2013. There was also an expert-led discussion between Ministers at lunch on the topic of future growth in Europe.

  In February the European Council agreed a budgetary package for the period from 2014 to 2020 for policies focusing on competitiveness, jobs and growth across a broad range of sectors. Recently the Irish Presidency reached political agreement with the European Parliament and the European Commission on a new multi-annual financial framework which unlocks €960 billion in investment across the entire European Union.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath As the Minister indicated there were successes during the six-month Presidency, in particular with regard to his stewardship of ECOFIN and he is to be commended on this. Although there are issues with regard to some of the details, it would be remiss of me not to acknowledge this.

The question I tabled is particularly relevant in the context of the very weak economic data we had last week. Unfortunately the country is back in recession, ostensibly because of weakening external demand and the situation in the eurozone and other developed economies. Much of what we hear from European summits and ECOFIN meetings in terms of growth-friendly statements and policies is impenetrable to people and it is very difficult to translate what has been decided to what is actually happening on the ground.

The Minister referred to the country-specific recommendations from the European semester and gave some examples of issues relating to Ireland such as credit, regulation and the role of the European Investment Bank, and there has been some progress on this. There is a crisis in the eurozone in particular, with more than 12% unemployment as confirmed yesterday, 26 million people out of work and record levels of youth unemployment. It seems the triple A-rated countries which have been fiscally very prudent are all engaged in fiscal consolidation as well as countries such as us which must do so.

The lack of co-ordination of fiscal and economic policy throughout Europe has resulted in the scenario we are dealing with now whereby external economic demand, in particular among our main trading partners, is weakening at a time when we depend on an export-led recovery. It is more threatened than it has been previously. Will the Minister give practical examples on the ground of the knock-on effects and the implementation of decisions in Europe and ECOFIN and how they translate to Ireland and how they can help our economic growth?

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