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Address by H.E. Mr. Martin Schulz, President of the European Parliament (Continued)

Thursday, 4 October 2012

Dáil Éireann Debate
Vol. 777 No. 2

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(Speaker Continuing)

[Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin]  For the first time in the Union's history a majority of its citizens believe it is heading in the wrong direction and are concerned about its future. At the same time Europe's traditional enemies from both the right and the left have been emboldened. While ignoring their own histories of opposing everything that delivered jobs, rising living standards and peace to Europe, they are pushing their anti-EU agenda with a new force. As we saw during our referendum campaign, they have many forms of attack but their proposals fall apart under basic scrutiny. However, no one should underestimate the damage they can do as they put their cynical and populist search for votes ahead of offering credible alternatives. There is no way that this situation can improve unless the leaders of Europe acknowledge that their behaviour last year, their failure to show all members respect, their exclusionary negotiations and their timid agenda combined to cause enormous damage.

The effort last week of three governments to impose their will concerning June's banking deal was partly caused by the failure of other countries to be more active, but it was nonetheless unacceptable and directly contrary to spirit of solidarity without which the Union cannot work. The attitude to what is now termed the legacy debt of the crisis betrays a continued refusal to accept what has happened. In Ireland's case, a significant amount of the bank-related debt we took on was directly driven by the fears of the ECB and others of contagion in the financial system. We showed our solidarity at that time and to brush this off as a purely national matter is a disgrace.

It is also now widely acknowledged that the lack of measures then - which are in place today - explains why Ireland needed a support programme in 2010. The different funds which have been put in place as well as the ECB's new OMT facility have completely changed the dynamic of the crisis. Had the proposal of Guy Verhofstadt, MEP, the leader of our group in the European Parliament, for euro bonds been accepted two years ago, we would now be looking back on the euro crisis rather than fearing where it will go to next.

A number of specific policies are desperately needed of which the banking union is now the most important. Without it confidence in the European financial system will never be fully restored and therefore growth will be undermined. National regulation within a multinational currency has failed, as the President of the European Parliament so eloquently detailed in his contribution, and must be replaced. Equally, a common approach to bank resolution and deposit insurance is unavoidable.

The effort by some countries to impose common rules but reject any possible transfers reflects a continued adherence to a model so flawed that even its principal architect Jacques Delors has criticised it. The European Central Bank must be allowed to push ahead with a bond purchase programme which is unlikely to be needed if it is allowed to be established. There is no way of avoiding the need to give confidence to investors that there is a lender of last resort. Should some of the compatriots of the President of the European Parliament succeed in their campaign to stop Mario Draghi it will be a dark day for the people of Europe.

The Union's budget will shortly be debated and the usual arguments about diverting money from existing programmes will be had. Quite simply, Europe has set itself objectives which cannot be met without a significant increase in the budget. It has no real capacity to turn around regions with mass unemployment. It cannot alleviate the austerity which is inevitable in some countries but avoidable on a pan-European basis. The President of the European Parliament rightly raised the youth guarantee and the issue of youth unemployment. The litmus test for that will be the EU budget. Rhetoric on its own, agreements and memoranda of understanding will not solve that. The litmus test for our sincerity and the sense of urgency we attach to the issue of youth unemployment will be really tested in the context of the European budget and it is a key moment in the evolution of this crisis.

Unfortunately the current debate appears to be all about undermining the one area where the Union has a comprehensive and progressive support policy. The days of food mountains and wine lakes are gone. European funding is now enabling permanent food security, rising food quality and the protection of a rural environment which would otherwise be under great pressure. Ireland's rural communities are innovative and forward looking, but what they and similar communities throughout Europe receive from these programmes is essential and must be protected. This is a moment when citizens need the Parliament to act as a counterbalance to the ongoing failures of the leaders who meet in the Council. Citizens need the Parliament to take up these issues with the energy so lacking from the Heads of State and Government. Citizens need the Parliament to be a voice for a budget that protects programmes which are working and funds direct support for countries and regions which are bearing the biggest brunt of the crisis. Citizens need the Parliament to be true to the Union's founding ideals of solidarity and generosity between states and to push others to be true to them as well. The crisis that caused a generation of visionary leaders to found what is today the European Union was a dark one hopefully never to be seen again. I look forward to our continued relationship with Mr. Shultz's Presidency.

Deputy Gerry Adams: Information on Gerry Adams Zoom on Gerry Adams Ba mhaith liom fáilte a chur roimh an Uachtarán Schulz. Tá súil agam go raibh seans aige taitneamh a bhaint as ár bhflaithiúlacht Éireannach agus go mbeidh turas maith aige anseo. Ba mhaith liom "go raibh míle maith agat" a rá leis as ucht na focail an-soiléir a dúirt sé. I welcome Mr. Shultz, MEP, the President of the European Parliament, and thank him for his remarks. I will deal, first, with the immediate financial crisis facing the State and Europe and will then make some comments on the future direction of the European project.

For the past five years states across the European Union and European institutions have been grappling with fiscal and banking crises. A succession of summits has failed to deliver any concrete solution. The previous Government informed us that the State was coerced into a European bailout by the European Central Bank and other European leaders in 2010. It claimed that EU institutions insisted that the Irish taxpayers should carry the burden for the bad banking debts of private institutions and the banks.

In June this Government returned from the European Council summit claiming it had secured agreement that this bad banking debt would be lifted from the shoulders of Irish citizens. The Taoiseach called it a "seismic shift" and the Tánaiste described it as a "game changer". However, last week's statement by the so-called "Helsinki three", the finance Ministers of Germany, Finland and the Netherlands, that the ESM bailout fund would only deal with future banking liabilities, sharply contradicts these assertions. This situation was made worse by the European Commission President's, José Manuel Barossa's, very clear refusal yesterday to back the Government's interpretation that the June agreement would deal with legacy debts in the banking system.

I welcome remarks of the President of the European Parliament on this issue today, though I note he couched them as his personal opinions. I especially welcome his eloquent comments on the need for solidarity. He said that the bigger member states should not give lessons to the smaller ones and I agree. However, he will know that thus far, as far as the leaders of the bigger European states are concerned, smaller states such as this one can be treated with disdain and left to carry the burden of debts that are not ours.

Unlike the Government, Sinn Féin from the very start of this crisis has been advocating a write-down of private bank debt. Bank debt needs to be separated from sovereign debt. The burden of bad banking debt, the so-called legacy issue, which was foisted on the shoulders of the Irish people, also needs to be removed.

At the conclusion to recent EU summits there has been much talk about a renewed focus on jobs and growth rather than austerity, but people need to see delivery on these promises. European leaders are failing to tackle the jobs crisis. Some 24 million citizens are unemployed across the EU and in this State 440,000 people are on the live register. The scourge of emigration is once more a factor for families and communities, particularly in rural areas. The eurozone countries urgently need investment in jobs, particularly in the peripheral states.

This can be achieved by among other measures an enlarged investment fund in the European Investment Bank. However, the passing of the recent fiscal austerity treaty is undoubtedly bad for jobs and for growth, and will hamper prospects for economic recovery. Research published last week by the Central Bank of Ireland indicates that the State will need to run austerity budgets until 2020 to meet the targets set down in the treaty.

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