Official Engagements (Continued)

Tuesday, 30 April 2013

Dáil Éireann Debate

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(Speaker Continuing)

[Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin] In the context of holding the EU Presidency, is the Taoiseach pushing for policy initiatives similar to those advocated by Christine Lagarde, the head of the IMF? Does he agree with her? Does he support her call and will he be doing anything in the remaining period of the Irish Presidency to advance the issue?

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny In respect of telecommunications and Myanmar, I had a visit from a company interested in Irish potential in the area. I had an engagement with it about the possibilities it sees for Irish involvement in trading with a country that has enormous resources and has distinct possibilities for a trading nation such as this country. I have never been there. I discussed the matter briefly with a member of one of the international telecommunications companies in Davos, who attended the IDA-sponsored function where there were 40 chief executives of international companies. In Myanmar, less than 2 million people have had access to mobile communications out of a population of 60 million. A quantum leap will be involved in going from no communications to all the modern methods of communication. In many ways it will be a social experiment for a people who have had centuries of limited capacity to connect around the world.

I and the Minister for Finance, Deputy Noonan, met Christine Lagarde, the director of the IMF, and we discussed the issues of the day, namely, the promissory notes, debt reduction and the ongoing programme with this country of troika visits, including the IMF. We also referred to the decision of the European Council of 29 June 2012 to break the link between the sovereign and bank debt, the importance of the single supervisory mechanism being set up by the Ministers and approved by the European Council, with the architecture to be available by June of this year and to take effect on 1 March 2014. We discussed the question of banking union and the impact that could have on fractured systems throughout Europe which are very important for all the economies. It is clear that will be a test of credibility for the European Council meeting in June of this year, which is now being pursued by us as Presidency in respect of resolution and the issues that will have to be decided in that regard.

On whether I share the director’s view, the meeting was in advance of the promissory notes and we made the point about the difficulties it was causing for this country’s economy and people. We have already availed of a one-year extension. We have clearly set out our plan to have our deficit below 3% by 2015 and we intend to stick to that target. The IMF has in general been most supportive of this country’s claims for dealing with debt levels and the challenges we have and will face in the future. In that sense, it was a general discussion about European issues - our incoming Presidency; the priorities for us of growth, stability and jobs; the co-operation of the IMF in seeking to get the agreement and consent of our European colleagues for debt reduction in the extension of maturities, which has now happened; the question of the promissory notes; the structure of banking union; and how it might be possible to construct a situation where we could get money back for taxpayers arising from the recapitalisation this country was required to make a number of years ago.

Deputy Mary Lou McDonald: Information on Mary Lou McDonald Zoom on Mary Lou McDonald In recent times President Barroso of the European Commission thought out loud and said in his view that austerity had reached its limits. Prior to that a former employee of the IMF, Ashoka Mody, said that reliance on austerity is counterproductive. Did the Taoiseach discuss any of those matters with Ms Lagarde or did he draw her attention to the huge dilemma we face within the domestic economy? Did he discuss with her growth-focused initiatives and policies that would be most suited to this country? Did the Taoiseach tease out with Ms Lagarde that people are now saying that the view within officialdom is that austerity has either run its course or is in some cases deepening problems? He knows as well as I do that as long as domestic demand and confidence are on the floor, we have a big problem in the domestic economy and, by extension, in respect of employment and unemployment rates. Did the Taoiseach explore any of those issues with Ms Lagarde?

The previous time the Taoiseach referred to discussions in Davos with people about the opening up of telecommunications was in the context of the G8 summit. I remind him that he said:

When speaking to people in Davos, the issue of the opening up of Myanmar, the former Burma, arose. It is a country of which we do not have great knowledge, although there were real connections between Ireland and Burma as it was called. That country of 60 million has a huge range of natural resources, yet some 58 million of its people have never had access to communications. That country will move from what might be termed ground zero to cloud computing and cloud access straight away. The scale of the investment there will be enormous.

That is what the Taoiseach said on 12 February. He clearly recognised a big investment opportunity in that regard. Will he elaborate a little more on whom he discussed those matters with in Davos? He said it was a member of an international company. Does he recall who it was or who they were? I ask that because I understand that Digicel, the company controlled by Denis O’Brien, is pursuing one of the two telephone licences currently on offer in Myanmar. Did that form part of the discussion?

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny No, I did not discuss the questions Deputy McDonald raised arising from Mr. Barroso’s comments or the comments of Mr. Ashoka Mody, the former IMF employee, because they had not been made at that time. As I indicated to Deputy Martin, we discussed the range of priorities for our Presidency, the challenge for this country and the difficulties people were experiencing because we did not have a resolution on the promissory note, nor indeed a resolution in respect of an extension of lower maturities to flatten the debt profile. Neither did we have any real fix on the single supervisory mechanism. At that time, not much progress had been made on banking union, which will have an important part to play.

I made the point previously that when the gentleman from the IMF was in this country as one of the lead persons, he spoke in a very different way about the issue and the challenge arising from the much abused term, austerity. It is clear that one can neither tax one’s way back to prosperity nor achieve it through austerity. The challenge for us is to stimulate the indigenous economy and to restore a sense of confidence. In that sense, decisions made by Government have impacted on competitiveness, which has increased by 20%. We are creating 1,000 jobs per month in the private sector, which is important when compared with a loss of 7,000 a month for a number of previous years. An example of the progress made is the major announcement today by Glanbia of a significant investment which will create 500 jobs on the construction of the new plant in the south Kilkenny-Waterford area, which will provide up to 1,500 jobs on family farms from north-east Cork up to Louth, with the abolition of milk quotas. They are important signs of confidence. One should also note that a contract was signed this morning for the N11 and the Newlands Cross junction, which is a significant road development that will provide both transport links and contract jobs. It will allow the Government to move on to the next public private partnership priority, which is the road from Gort to Tuam.

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