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European Council Meetings (Continued)

Tuesday, 25 March 2014

Dáil Éireann Debate
Vol. 835 No. 1

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(Speaker Continuing)

[The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny] At the discussions that took place in Brussels, a three-phase approach was agreed. We discussed how the freezing of assets and the imposition of visa restrictions would impact on the individuals involved. Clearly, the United States was making arrangements to do something similar in parallel.

This will change the nature of the discussion in this country about Europe and about energy in particular. The European Union cannot continue in its dependence on Russia. The decision of the European Council meeting last Friday, in respect of climate change and energy, was to press ahead with the development of the southern corridor and with further interconnectors in the Mediterranean region in respect of gas, as well as an expansion of the possibility for gas from Spain and Portugal to be supplied to other parts of Europe, namely around the Pyrenees and onto the French system.

We have heard other leaders speak about their dependence on Russia for energy. The Ukrainian Prime Minister, Mr. Yatsenuyk, made the point that Gazprom was about to increase the cost of gas per cubic metre from €200 to over €400 and that other countries were paying that for their freedom. That is why the political elements of the agreement with Ukraine were signed by all members of the Union on Friday morning in Brussels, reducing the impact of tariffs and restrictions on goods being exported to the EU from Ukraine. Some countries in the region which are members of NATO are completely dependent on Russia for equipment and spare parts. As the Danish Prime Minister remarked to me, it is a case of living with Russia. During the Danish-led effort in Syria to remove chemical weapons, for example, the first point of contact for the Danes was with a Russian frigate. It is a case of not closing off the options and of asserting the fact that we have no difficulty with the Russian people. The point is that the political leadership in Moscow has made a unilateral move in acquiring that part of Ukraine known as Crimea. As Deputies will know from history, this country lost 30,000 fighting men in the Crimean War in the 1850s.

There was a seriousness about the meeting and general agreement that this has gone too far. People were very anxious to take steps that would impact on Russia in a way that had never been done before. The European Commission was asked by the European Council to prepare a report on further and broader economic sanctions that might be applied which would be really hurtful. However, it must be said that economic sanctions cut both ways and can have an impact on this country too. There are 200 companies in Ireland which supply goods and materials to Russia and these are important considerations.

Countries that were formerly part of the Soviet Bloc and which border Russia are fearful of invasion and are acutely aware of their dependence on Russia for their energy needs. The nature of the debate on energy independence and energy dependence will change as a result of what has happened. We can only hope that the Government of Ukraine will hold the promised free and fair elections in May. Ukraine needs cash, however, and it needs it now - a sum of €2.5 billion is required to pay for gas as well as to meet wage bills and so forth. At the meeting in Brussels the EU High Representative, Ms Ashton, presented a list of the requirements of the Ukraine army, which included shoes and jackets and all of the other basics that a standing army would need, giving an indication of how ill-equipped the army is to defend the country. It was a serious meeting with serious people putting a strategy in place. It was agreed that if there is any more escalation of the situation, broader economic sanctions will apply and will be implemented.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin We are dealing with questions Nos. 1 to 35, which address a broad range of issues.

After last December's meeting of the Council of Europe the Taoiseach said again that all of the agreements meant that the toxic link between sovereign and banking debt had been broken. What he has yet to do, however, is to explain how this is actually the case. It is a year and a half since the Taoiseach and the Tánaiste declared victory on this point and spoke about a seismic shift and so forth. I have asked the basic question on a number of occasions, namely, "what exactly is Ireland looking for?".

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny Pardon?

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin What exactly is Ireland looking for in terms of the debt situation and the breaking of the link between sovereign and financial sector debt?

Yesterday my party revealed letters from Mario Draghi to our finance spokesperson, Deputy Michael McGrath. Essentially, Mr. Draghi said that he does not agree with the Government's claim that everything is progressing fine with Ireland's banks. If one reads his letter, in response to Deputy McGrath, one sees that he is distancing himself significantly from the Central Bank's assessment of the capital adequacy of our banks. This followed a letter we wrote to him in the aftermath of his comments to the effect that the impaired loans in our banks needed swift and direct action. He implies in his correspondence that further capitalisation may be required. Can the Taoiseach explain how that sits with the Minister for Finance's claims, as well as his own claims, that Ireland will be reimbursed retrospectively for past recapitalisation. Furthermore, the banking union will provide enough money to cover less than 1% of the capital base of the covered banks. Does the Taoiseach believe that is adequate? Is he happy with that? Does he believe it is an adequate amount? I think it is ridiculously low and cannot, in any shape or form, be considered adequate in terms of a resolution mechanism into the future.

On the issue of Ukraine, I welcome the decision to go to stage three sanctions. Russia's behaviour effectively partitions a former colony and that cannot be let stand with what I consider to be very weak measures, diplomatically. I get the sense that the United States is leading the charge and that the European Union is divided between those who want tougher sanctions and those who want to delay the imposition of same for various economic reasons. The Taoiseach's comments about trade some moments ago suggest that the Russian ambassador's public warnings to the Government last week are hitting home already. What position did we take at the European Council meeting? Did we support those who were looking for stronger sanctions, those who advocated holding on and waiting or did we just wait for a final agreement to emerge and jump on that particular line? We did not take any public stand on it, to the best of my knowledge.

The Taoiseach referred to the issue of surveillance in his reply. At the time of December's European Council meeting, the bugging of European governments was a very big issue. Much of that surveillance was carried out by the British facility in GCHQ. Other countries have been far more direct than us in asking about bugging of conversations and in demanding transparency from the United States and others. Have we done the same and specifically, has the Taoiseach asked the British Prime Minister whether the British Government bugged Irish communications during sensitive negotiations on Northern Ireland? Did the Taoiseach have that discussion with David Cameron?

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny On Ukraine and the divisions at the European Council regarding sanctions, a range of views were expressed. Some were very forthright in saying that we should move to level three sanctions quickly, while others disputed that, particularly those countries which are close to and dependent on Russia.


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