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European Council in Brussels: Statements (Continued)

Tuesday, 2 July 2013

Dáil Éireann Debate
Vol. 809 No. 2

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(Speaker Continuing)

[Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin] The documents agreed last week contain no hope of a new direction and no answer to the rising evidence of a deeper economic downturn taking hold in Europe.

  The need for an urgently arranged final meeting involving the heads of the different institutions proved that the budget deal announced the previous week was no deal. It is welcome that there is a political agreement on a budget but there is no circumstance in which Ireland should welcome this budget. No matter how the Taoiseach spins it, the multi-annual financial framework, MFF, will hinder, not help growth in Europe. It implements a cut in the European Union’s already low share of the European economy. By definition, cutting spending will be deflationary. Even more seriously, to fund some new areas, existing ones are to be cut severely. The rural economy will feel this most but so too will sectors which were relying on Europe taking a leading role in promoting growth through innovation. While the €6 billion youth employment fund has been improved because of the European Parliament’s demands, it still is wholly inadequate. It is not large or focused enough to make a major difference in any country and over-selling it is foolish.

  Last week’s agreement on the Common Agricultural Policy, CAP, is welcome because it does less damage than was originally feared. The 10% cut to overall funding that was agreed by the Council will cause serious problems. However, Fianna Fáil welcomes the withdrawal by the Irish Presidency of its earlier position of skewing the budget towards larger units and away from the core social and environmental role of the Common Agricultural Policy.

  As for banking union, the spin about last week’s deal on the European Stability Mechanism, ESM, and resolution mechanisms has already fallen apart. This deal does not do what is claimed. After the deal, The Economist wrote that no matter what the politicians were claiming, “the poisonous link between weak sovereigns and weak banks in the euro remains intact”. Yesterday, the Financial Times went into more detail by writing:

It kills the last chance of a resolution that could have ended the depression in the eurozone periphery. In the brave new world of the EU’s resolution regime, all risks will be shared between various categories of bank creditors, which are mostly domestic institutions, and the banks’ home states.

The European Council.. has long become silent on the ceremonious pledge, made in June 2012, to break the link between sovereigns and the banks. Last week’s agreement did not break it. It has not even been diluted. It has been reconfirmed.

The Taoiseach must reconcile his claims about what was agreed last week in respect of banking union with these independent assessments of what was agreed.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny The Government has made significant progress but the Deputy will not admit it.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin Even today's edition of The Irish Times points out: "As yet there is scant progress on breaking the vicious circle between banks and sovereign states which so excited the Government last year."

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny The only truth the Deputy has spoken today is he failed to admit it-----

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin Some Ministers are claiming the effort to secure ESM funding retrospectively for Irish banks has been damaged. What they have not done is to explain what Ireland has been seeking. The Minister, Deputy Noonan, told a Dáil committee last year that he could not see the benefit from selling our bank stakes to the ESM. Has this position changed?

During this Presidency, Ireland fulfilled its core responsibilities well. It handled the agenda it was given by President Van Rompuy and delivered the required agreements to keep most of the items on track. However, at the end of the Presidency, Europe has not returned to stability, jobs and growth, as the Taoiseach keeps claiming. Our political leaders did not try to change the agenda.

Acting Chairman (Deputy Ann Phelan): Information on Ann Phelan Zoom on Ann Phelan I must ask the Deputy to conclude.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin I will do so. They did not try to push a move away from failed policies or towards badly-needed reforms of the Union.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny What about reform of the Common Fisheries Policy or CAP reform or Erasmus programme reform or the Europe 2020 targets?

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin Nothing was done which gives any sense that Europe is actively working to help its 27 million citizens who are unemployed. Unfortunately, this was a lost opportunity.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny Fire that scriptwriter.

Acting Chairman (Deputy Ann Phelan): Information on Ann Phelan Zoom on Ann Phelan I call Deputy Adams, who will share time with Deputy Crowe, namely, seven and a half minutes.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin The Taoiseach is good at firing these days.

Deputy Gerry Adams: Information on Gerry Adams Zoom on Gerry Adams Go raibh maith agat, a Chathaoirligh.

Deputy Timmy Dooley: Information on Timmy Dooley Zoom on Timmy Dooley I hope the Taoiseach is not obliged to fire his colleague sitting beside him-----

Deputy Gerry Adams: Information on Gerry Adams Zoom on Gerry Adams Last week's European Council summit marked the end of our Presidency.

Deputy Timmy Dooley: Information on Timmy Dooley Zoom on Timmy Dooley -----when he finds out which way she intends to vote.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny The Minister had an historical achievement.

Deputy Gerry Adams: Information on Gerry Adams Zoom on Gerry Adams Lads, an bhfuil seans ar bith agam?

While I disagree with the Taoiseach's policy on many issues, I commend the great energy he brought to these challenges. Some progress was made on several issues, such as the Common Agricultural Policy and the Common Fisheries Policy, but it is fair to state the Presidency was characterised by spin and exaggeration on many occasions, not least in the Taoiseach's remarks today. Indeed, during the final weeks of the Presidency, the negotiations on the European Union budget or multi-annual financial framework were nearly undone by the Tánaiste and Minister for Foreign Affairs and Trade, Deputy Gilmore's overzealous overselling. The Taoiseach's claim to have secured a deal on the European Union budget was met with the resignation of the negotiator for the European People's Party amid accusations that the Tánaiste was misleading people. While the budget has been cobbled together and will be voted on by the European Parliament this week, many MEPs remain deeply concerned both by the budget itself and by the way in which it was agreed. It represents essentially the continuation of the austerity approach that has contributed to the current crisis and it cannot be welcomed. If it is passed, it will see substantial cuts to important European Union-wide programmes. The immediate impact will be a cut of 6% for 2014, which includes a cut of 25% to research and innovation funding, an 11% cut to the rural development programmes, a 14% cut to health and consumer protection funding, a 9% cut to the Cohesion Fund and a cut of 19% to development aids.

Consequently, while the Irish Presidency of the European Union bears all the hallmarks of austerity, the outcome will be to see more of what everyone has experienced in the recent past. Were further proof needed, the latest figures from the Central Statistics Office show the State once again is in recession. The decline in gross domestic product reflects the depression in consumer spending and high unemployment and all this constitutes an indictment of the Government's policy. One significant impact of these policies, which the Taoiseach has marked down as one of the landmark achievements in his remarks today, is the issue of youth unemployment. Only €6 billion has been allocated to tackle youth unemployment, which is a drop in the ocean compared with what is required. In some parts of the European Union, unemployment among young people under 25 is as high as 50%. Nearly one quarter of those aged between 18 and 25 across the Union are out of work and in this State, the figure is one in three. This means that 5.5 million young people are unemployed across the European Union. This morning, the Taoiseach told the European Parliament that tackling the blight of youth unemployment was an absolute priority, but yet 91,664 young people are out of work which is treble the level of four years ago. Moreover, Members are aware that these figures are massaged by the fact that tens of thousands of Irish youngsters are scattered across the globe. All the policies the Taoiseach is pursuing here and in Europe are aggravating and increasing the blight of youth unemployment, not ending it.

Moreover, the chances of a deal on our legacy banking debts faded in recent times. This is the same deal the Taoiseach and the Tánaiste and Minister for Foreign Affairs and Trade, Deputy Gilmore, told Members would be concluded by last October and then by this June. This was to be a seismic shift, a game changer and while European Union finance Ministers have agreed on procedures to deal with future collapses, there is no firm commitment about the nearly €30 billion of Irish taxpayers' money that has gone into the pillar banks. Lest one forgets the €30 billion that was used to pay off the debts of Anglo Irish Bank, that has been kicked down the road but thanks to Fine Gael, the Labour Party and Fianna Fáil, our children and perhaps their children will be paying for the greed and reckless behaviour of those greedy bankers for years to come. The fact also remains that nothing has been done to break definitively the link between sovereign and banking debts, as was promised more than a year ago. What is to be the role of the ESM? While a €60 billion fund has been made available to deal with bank recapitalisation, this fund seems far too small for what is required. Did the Taoiseach not tell Members that the ESM would mean retrospective recapitalisation of Ireland's bad banking debts? Is this still the Government's objective? Sinn Féin has repeatedly called for the Government and its Fianna Fáil predecessors to save the taxpayers from the burden of this debt.


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