The Irish and European debt crises are inextricably linked.
It is impossible to talk about national strategies for tackling Ireland’s massive debt problems without touching on the wider European debt crisis. The extent of the massive debt crisis that Ireland faces is linked to our membership of the Euro-zone, and in particular the access it provided for Irish banks to cheap credit. Ireland is not the only Euro-zone Member State experiencing a crisis – the EU countries in crisis now account for about a third of the Euro area’s GDP. The banking and financial systems of EU Member States are closely connected, and also the political decision-making systems which support them. There is a legitimate expectation that a European level solution can be found to the Euro-zone’s debt crisis.

Ireland’s withdrawal from the Euro would have a very negative impact on the Euro-zone, and the global economy.
If Ireland were to decide to withdraw from the Euro-zone, the decision would have potentially very serious consequences for other Member States. Financial analysts and commentators have expressed their belief that the “mother of all crises” or a “financial Armageddon” could result if the already very volatile markets were to become spooked by the sovereign default of one or two Euro-zone Member States. It would not just be other crisis-stricken EU Member States that would be affected. The Italian Finance Minister recently likened the Euro-crisis to the Titanic. He pointed out that even though stronger Euro-zone countries like Germany are in the first-class cabin, when the boat hits the iceberg, all of the passengers are affected.

The financial disarray and systemic dysfunction that would infect not just the European but potentially the global economy if the Euro collapsed would be immense. The Euro is now the world’s second international currency after the US dollar, making it of major significance for market transactions, central bank holdings, pension funds, insurance companies and government agencies. There are more euros in value than dollars circulating this year – 820 billion euro against 940 billion dollars. About one quarter of China’s 3.2 trillion overseas currency holdings are in euro, giving them a real interest in the euro’s survival.

It goes without saying that one of the results of the break- up of the Euro-zone would be a considerable amount of “wealth destruction” – the loss of a huge amount of value that is stored in bonds, stocks and shares on the international financial markets. But the real litmus test that should be applied in assessing the impact of any meltdown of the Euro-zone would be its effect on ordinary people, and on the most vulnerable in society. These people are usually the real casualties of any deep economic recession. In the event that the Euro-zone broke apart as a result of one or several sovereign defaults, it is very likely that general liquidity would dry up as part of a overall credit crunch, citizens would not be able to access cash from their bank machines, small businesses would not be in a position to pay their creditors, and the continued payments of public sector wages and social welfare entitlements would be difficult, if not impossible. Chaos and turmoil would rein and great hardship would be inflicted on the population at large.

The option of Ireland reverting to its national currency is not a panacea
As Europe’s political class shows little real leadership, and as the international markets become more volatile by the day, the opportunity for Ireland to regain control over its own monetary policy and to benefit from many of the advantages of competitive devaluation appears superficially at least to be a sensible course of action for the Irish economy.
Unfortunately this approach is sometimes advocated on the basis of ideological and nationalistic reasons rather than an objective analysis of the likely economic consequences of this course of action. A recent UBS report suggested that the costs for countries leaving the Euro could be up to 50% of GDP. I don’t have the time to mention all of the potentially negative consequences of a reversion to a national currency and its devaluation. Let me take one example – that of our energy imports. Although a devalued currency might be very helpful to Ireland in some respects, how would the country deal with the high, and rising prices of our imported energy- oil and gas – which we rely on to meet over 90% of our energy needs on this island? Oil and gas are priced in dollars on world markets. After a devaluation, the costs of these fuels would hugely increase in terms of the devalued currency .People being paid in the devalued currency would find their fuel and indeed all their imports more costly. Wages would have to be allowed to rise to some extent to correct for this. The positive impact of the devaluation could neutralized in this way. These are the kinds of issues that need to be fully considered as Ireland tries to identify the most appropriate strategy to respond to its massive debt crisis.

An effective European-level response to the crisis is more compatible with Ireland’s long-term strategic interests
It is important to look closely at the long-term implications of any decision by Ireland to leave the Euro. Quite apart from the immediate and potentially serious market impact it is likely to have for other EU Member States, it is also likely to undermine the political and economic cohesion of the European Union in the longer –term.
Why should this be an issue for Ireland? Firstly Ireland’s membership of political and economic community that it joined almost 40 years ago, and from which it has gained significant benefits, cannot be an a la carte one which is abandoned when times are difficult and renewed again when conditions have improved. No political system could accommodate this kind of radical flexibility and continue to offer stability and continuity to its member states, or instil confidence in the wider international community. Furthermore, if Ireland leaves and the Euro-zone breaks up, the wider European project will be fatally damaged. I want to suggest this morning that it is in Ireland’s long-term strategic interests that the European Union remains a strong economic and political player in an increasingly uncertain international economic context, one where the global economy was already shifting to the East – to emerging economies like China and India – even before the crisis struck.

The international context is characterised by growing levels of risk and uncertainty
What do I mean by this? The excellent work that Feasta has carried out over the past decade has concentrated on the issues of economic growth and the debt –based money system, energy and climate. The organisation has consistently predicted that the international community will face three major interconnected crises over the coming decades– a financial crisis linked to the way in which the global debt-based money system works, an energy crisis and the crisis of accelerating climate change. We are in the midest of a very serious international financial crisis right now. The global energy crisis and the growing crisis of climate change still confront us. In the past it has been easy to dismiss Feasta’s predictions as typical of a group of environmentalists!! Unfortunately its predictions are being borne out to a greater extent with the passing of time.

A politically strong and economically cohesive European Union can play an effective role in global efforts to tackle risk and uncertainty in the global economy, particularly where energy scarcity and climate change are concerned.

The development of a continent-wide Energy Community is a major policy imperative for the EU, as it should be for Ireland
The ratification of the Lisbon Treaty enabled the European Union to gain new powers in the area of Energy Policy. The urgent need to develop an Energy Community within the European Union was seen as a major policy imperative. The International Energy Agency accepts that the peak in conventional oil production (otherwise known as Peak Oil) has been passed, probably in 2005. Energy prices reflect this, and continue to rise. Ireland has one of the highest energy import dependency rates of any country in Europe with 91% of all the country’s energy needs having to be imported. This costs the country at least €6bn a year at present. Ireland is not alone in its vulnerability to rising energy prices, or to potential interruptions to global oil and gas supplies. Already the 27 EU member states import more than half their supplies of oil and gas, a proportion that will rise to 70 per cent in 2030 if nothing changes. The recent upheavals in the Middle East and North Africa have also introduced some uncertainly in relation to the EU’s reliance on this region for a large share of its future energy supplies. EU leaders have pledged to reinforce the union’s fragmented energy infrastructure with new interconnections so that gas and electricity can move more freely between member states. They have also promised to boost investment in renewable energy sources to reduce harmful emissions, and to allow the Union become more energy independent.
As a small, peripheral energy market on the outer reaches of Europe’s existing energy systems, Ireland has much to gain from the implementation of a comprehensive EU energy strategy and much to lose if it fails. The plan involves the creation of an offshore North Sea electricity super-grid, an initiative already backed by Ireland and nine other partner countries. This grid would offer connection to northern and central Europe to transport power produced by offshore wind parks to big cities on the European mainland and to store it in hydro-electric plants in the Alps and the Nordic countries. There would also be new electricity interconnections in south-western Europe to transport wind, solar and hydro power to the rest of the continent. A southern gas corridor would be created to deliver the gas directly from the Caspian Sea, reducing dependence on Russian supplies. From a financial perspective the investment required is very considerable indeed. In the next decade, the EU Commission President José Manuel Barroso believes as much as €1 trillion may be required to replace old systems and to cater for increased demand. It is clearly in Ireland’s interests to remain centrally involved in a strong, economically cohesive European Union in which these ambitious but critically important energy objectives can be realised. There will also be many economic opportunities created in Europe’s energy sector that can be exploited by Irish companies, not just in our domestic economy, but across other European Member States and internationally.

Ireland’s membership of the EU enables it to participate in international efforts tackle climate change

Former Vice President of the US, Al Gore, a prominent voice in the international debate on climate change, has spoken of the need for an unprecedented level of global co-operation in order to respond effectively to the growing threat of climate change. The international community has begun to accept that if tackling climate change does not become a global priority, the economic devastation that it will eventually wreak will be immeasurable. The Stern Review on the Economics of Climate Change commissioned by the British government and published in 2006 by economist Sir Nicholas Stern stated that climate change is the greatest and widest-ranging market failure ever seen, and that the costs of not acting on this growing global threat will be equivalent to losing at least 5% of global gross domestic product (GDP) each year, now and forever. The report conceded that including a wider range of risks and impacts could increase this to 20% of GDP or more.

The kind of international co-operation called for by Al Gore has already begun within the UN’s International Framework Convention on Climate Change. Indeed the European Union has demonstrated considerable climate leadership to date in within this framework while many other global powers are unwilling to live up to their responsibilities. The EU is a signatory to the Kyoto Protocol and is the only major power to have established its own internal Carbon Emissions Trading System (ETS). It is also trying to promote the establishment of a common carbon market involving OECD countries and other emerging economies by 2020. An EU-wide climate and energy package has been adopted by member states which commits them to binding emission-reduction and renewable energy targets to be reached by 2020.

Importantly, the EU is also a major signatory to an international climate agreement reached in Durban last year which will direct substantial flows of climate finance to the developing world over the coming years. This will be an extremely important part of an effective global response to the impact of climate change. The financing requirements for climate change adaptation and mitigation will be considerable for developing countries which are already disproportionately experiencing the impact of climate change, a problem largely created by the rich developed world in the first place. As the populations of many developing countries live in poverty and are dependent on subsistence farming, the negative impact on their livelihoods of unseasonal weather, extreme floods, droughts, desertification and so on is immense. There is an urgent need to ensure that the resilience of communities in much poorer parts of the world to the impacts of climate change is greatly increased. It is also important to recognise that the spending of this climate finance will present significant overseas economic opportunities for Irish and European businesses, as a significant transfer of technology, expertise and services will be required. If the Euro-zone were to break up however, and the European Union significantly weakened as a political system, the probability of its global leadership on climate change being abandoned would be high. This outcome would significantly undermine existing international efforts to tackle climate change, and should be avoided at all costs.

Any European- level solution to the debt crisis must be based on an acceptable level of popular consent
The perception that politics and economics are very separate spheres of activity is a popular one. In fact macro-economic decision-making is highly political in nature. Politicians understand the importance of popular consent where economic policy is concerned. In modern liberal democracies, governments cannot make economic decisions or implement economic programmes without at least the tacit support of a majority of the electorate. This can pose difficulties where governments have to implement economic policies that inflict pain on their populations. The assumption underpinning representative democracy is that enough of the population are capable of recognising when the economic conditions are so serious that they justify tough economic policies, to enable politicians to introduce the difficult measures without inciting revolution. What are the implications for the Eurozone’s debt crisis?

The European establishment’s response to the Euro-zone debt crisis has breached the most fundamental rules of the free-market capitalist system
Free-market capitalism has been a popular economic model that has commanded broad public support in the US, and increasingly in Europe over the past few decades. Political parties promoting these policies have been successfully re-elected. However, few would disagree that the excesses of free market capitalism caused the current debt crisis in the Euro-zone, facilitated by the flawed design of the Euro-zone project. The immediate reaction of the European establishment to the crisis has been to rescue the banking systems by facilitating the injection of vast amounts of capital into banks, many of whom acted delinquently during the boom years. Governments assumed the massive debts of the banks as sovereign debt. The ECB subsequently insisted on the implementation of a policy whereby no senior bondholders were permitted to suffer losses when their bonds matured. (This is despite the fact that the bondholders had accepted a certain level of risk when they took the bonds out in the first place). These actions – an emergency response to prevent the possible systemic collapse of European banking systems – breached and indeed corrupted the most fundamental rules of the free market capitalist system. They significantly undermine the credibility of any subsequent official attempt to impose punitive austerity programmes on the European public as part of an orthodox free- market capitalist response to the Euro-zone’s debt crisis

The banking debts for which ordinary citizens now bear the burden meet the definition of illegitimate or ‘odious’ debt
Having converted bank debt into sovereign debt, the burden of fiscal adjustment has since been shifted on to wage, welfare and labour market policies. From the perspective of ordinary people, the interests of the rich have been protected while the pain of the corrective measures will be borne by the middle classes and the less well- off. The approach lacks the kind of fairness and equity that must characterise any approach to tackling Europe’s debt crisis if it is to have democratic legitimacy. The concept of ’odious’ or illegitimate debt was one that was introduced into public debate about the debts of developing or third world countries whose despotic rulers had borrowed large amounts of money from the international community to fund what were often vanity or white elephant projects. These poor countries were left shackled by debts and interest repayments for expenditure from which they gained no benefit. Major international debt cancellation campaigns such as Jubilee 2000 were based on a fundamental rejection of the foisting of these illegitimate or odious debts onto populations that had no responsibility for creating them in the first place. It is not unreasonable to suggest that the banking debts for which ordinary citizens now have to bear the burden are equally illegitimate and should be subject to debt write- off or cancellation.

Mainstream political parties and, in the longer run, the EU’s parliamentary democracies, are likely to be the casualties of the ECB’s misguided approach to tackling the debt crisis
Developing the theme of democratic legitimacy a little further, it is because of the deep inconsistency in the overall response of the European establishment to the debt crisis that the austerity programmes being promoted increasingly lack democratic legitimacy. Unfortunately a rigid adherence to neo-liberal monetary policy has characterised the approach of the ECB to date. Marshall Auerback – one of our speakers this morning has accused them of “sado-monetarism” while other commentators like Paul Krugman has accused them of subscribing to a simplistic morality tale of debt and punishment where austerity programmes are imposed on delinquent states to pay for their alleged fiscal sins. These programmes will be more and more difficult for governments to implement as the austerity measures bite deeper. If the austerity programmes result in the kind of prolonged deflation, economic recession and high unemployment across the European Union that is widely predicted, the outcome will be even greater levels of economic crisis, matched by considerable political instability and social disorder. In the absence of an acceptable level of public consensus to support the hard-line policies of the ECB, the ultimate casualties of this misguided approach are likely to be the mainstream economic parties which have governed in Europe over the past few decades, and who are currently implementing these policies. In fact public trust in representative democracy itself will be seriously undermined. This is not in anybody’s interests. Any economic response to the debt crisis must be based on an acceptable level of popular consent.

Ideology must be set aside, and political and economic innovation embraced if Europe’s massive debt crisis is to be successfully tackled
It is clear that when attempting to resolve the massively complex debt crisis in Ireland and across the EU, there is a need to move beyond fixed ideological positions and to be willing to embrace new forms of political and economic innovation if a major financial and economic catastrophe is to be averted. ‘New paradigm thinking’ is needed, as the financial and economic problems that have been created by the neo-liberal paradigm are so great that they cannot be resolved within that same paradigm. The extent of the problems presented by this massive debt crisis will mean that the process of tackling them will result in a fundamental transformation of the system of economic management in Europe. Indeed it has been suggested by some that as the EU debt crisis is part of a global crisis, there will be a need for a co-ordinated, creative and multilateral response by the international community. This may involve the equivalent of a Bretton Woods II to rewrite the rules of the global economy for the new more uncertain future that confronts us. In other words the current global economic crisis, of which the EU debt crisis is a part, is likely to usher in a new global economic order. Given the extent of the debt crisis, the huge levels of uncertainty and the horrific scenarios that could unfold if the wrong policy decisions are made, there may be reluctance on the part of political leaders to engage in innovation. But innovate they must. European citizens must be convinced that a well-designed European level solution is more likely to promote economic recovery across EU Member States than purely national efforts.

Fiscal Union will not be enough
Fiscal Union is now spoken about as a major element of any likely European –level response to the debt crisis. This will require a new European treaty, which will have to be popularly ratified by some, if not all of the electorates of the Member States. I think most politicians who are living in the real world realise how difficult- if not impossible- it will be to secure the necessary levels of public support for such a treaty. Having been personally involved in two Nice Treaty & two Lisbon Treaty referendum campaigns in Ireland over the past decade, I think it would represent a political miracle if the Irish Government succeeded in persuading the Irish people to vote to ratify a treaty that introduces a fiscal union, as things stand. This is not because the Irish people are not capable of acting in their own economic self-interest, but because the prospect of having fiscal decision-making centralised in Brussels is likely to fill them with horror. Irish citizens, along with the citizens of countries like Greece, Portugal, Spain and Italy increasingly view the ECB as the institution that has bailed out banks, protected the interests of wealthy bondholders and acted as the enforcer of punitive austerity measures that are causing growing levels of unemployment, a reduction in wages and social welfare, the fire sale of strategic public assets to private interests etc.
Furthermore, in the inevitable push for the harmonisation of taxation that would follow a fiscal union, the loss of Ireland’s low corporation tax rate would be seen as a very negative outcome. For a peripheral island nation like Ireland, a low corporation tax rates helps us to attract foreign direct investment and compensate for the economic disadvantages that do not apply to many of the economies of mainland EU Member States. In fact, each EU Member State has its own particular set of economic concerns. Any European- level solution would need to be broad enough and sufficiently flexible in its design to accommodate the diverse needs of the different economies (In other words a ‘one size fits all’ approach won’t work). Finally, one of the most significant issues for EU citizens in relation to the Euro-zone debt crisis is that of the huge need for employment/ job creation, on which the livelihoods of most Europeans depend. Any European level solution to the debt crisis must be seen to tackle these issues if it is to win the support of the European public.

What might a comprehensive European- level solution to the debt crisis involve?
A European-level solution to the debt crisis will elicit the support of many citizens if they are convinced that sustained economic recovery is more likely to occur through closer EU economic integration rather than through national efforts. In my opinion, any comprehensive EU-level solution to the political and economic crisis that faces us at present needs to include the following elements if it to gain broad public support : (i) A fundamental reform of the ECB’s monetary policy, as has been suggested by the proponents of Modern Monetary Theory (MMT) in order to remove any risk of future insolvency on the part of the EU or its Member States, give the ECB the spending power it may require to realise its ambitious energy and climate objectives and enable it to respond to other major challenges or crises as they arise in the future. (For more information on MMT and its applicability to the Eurozone debt crisis, please see paper by Marshall Auerback on the Feasta website) (iii) Immediate debt relief provided by the ECB to Member States through the distribution of several trillion euros of debt-free money across all euro- zone nations on a per capita basis. This could be done in a controlled or staggered way to minimise the risk of inflation. This would not constitute a “bailout” as such, as Germany (with the largest per capita economy) would be the largest recipient. Each individual euro-zone nation would be allowed to use this emergency relief as it saw fit- whether to purchase some of its outstanding public debt or to introduce fiscal stimulus packages. (iii) A widening of the remit of the ECB to include the objective of creating full employment as well as maintaining price stability (Modern Monetary Theory also proposes a Job Guarantee Scheme which has the state taking on the role of employer of last resort) (iv) The introduction of a fiscal union with the flexibility to accommodate the diverse needs and circumstances of the economies of different Member States, and to allow for their gradual harmonisation over time (v) A clear and coherent overall macro-economic strategy supported by investment which will stimulate demand. This strategy should centre on the promotion of a green industrial revolution across the EU, and prioritise innovation and employment creation. The strategy could foster a much greater use of the Services Directive through the deliberate promotion of trade between member states in the areas of emerging green/knowledge industries. Many economic opportunities could be created for European businesses overseas as the EU met the climate financing commitments it has entered into as part of the international climate agreement it has signed (v) A material stake for EU citizens in the strengthening and consolidation of the European economy. Governments would be required to pass some of the money they receive from the ECB on to each of their citizens on an equal basis. The money could be used to either reduce citizen’s personal borrowings (ie mortgage debts) or people with no debt would be required to invest their gift in existing and new green industries to speed the EU’s transition to a low carbon economy.

It is essential that Ireland prepares its own national strategy
Although a European level solution to the debt crisis best reflects Ireland’s short and long-term interests, it would be a mistake for this country to adopt a passive approach to the overall resolution of the crisis. Ireland must be proactive in promoting its own proposals for a comprehensive EU-level solution. It must also have contingency plans in place to deal with a default on the part of another Euro-zone Member State and the possible disintegration of the Euro Area. Finally, it must have a strategy prepared to deal with the scenario whereby Irish citizens reject an EU-level solution in a popular referendum that they deem to be inadequate.
Thank you for listening to me this morning and I look forward to your questions later on.

The dawning realisation that conventional economic thinking, that did not foresee the crisis, cannot help solve the problems we now face means that we must be open to exploring new economic ideas.
It is time to move beyond criticizing the clear shortcomings of our country’s economists and politicians and consider – with open minds – economic ideas that are being developed outside of the mainstream.
Such a new macroeconomic model has been developed by a pioneering community of heterodox economists based in the University of Missouri, Kansas. Their Modern Money Theory (MMT) approach predicted the current crisis and so unsurprisingly, their analysis and economic solutions have attracted intense interest amongst economic commentators including Nobel Prize winning, Paul Krugmann.
MMT will inform a number of economic policies to be presented and debated in a conference entitled “Lessons from the Crisis: Money, Taxes and Saving in a Changing World” co-hosted by Smart Taxes, (Fiscal Policy for Sustainability Network) and TASC (Think Tank for Action on Social Change) on the 9th May 2011 at Croke Park, Dublin.
What does Modern Money Theory have to offer us that is different?
Although Modern Money Theory describes the money creation and management system of a fully sovereign (i.e. currency issuing) state, MMT is still relevant to Ireland in formulating strategy and its negotiating stance with the European Central Bank and European Parliament to address the debt crisis.
MMT tells us that the ECB can issue currency or liquidity at no cost to itself, nor to its constituent central banks, nor to the national economies of the Eurozone. The ECB already tacitly acknowledges this fact because it has declined to turn its liquidity support to the Irish banks – currently at €70b – into a medium term loan. Such a loan is actually unnecessary and not in Ireland’s interest as it would carry a substantially higher interest rate than the current 1% charged for the liquidity. The ECB provides the liquidity by simply crediting it in the accounts of the banks. The pretence that the liquidity given to Irish banks was provided in exchange for valuable assets has been shown up to be a non-essential requirement and notional fiction because the ECB has permitted the Irish central bank (a subsidiary of the EEB) to also credit the Irish banks without a matching transfer of bank assets of equal or greater value.
Under the MMT perspective, a central bank should not be concerned per se by the mounting sum in the sovereign government’s deficit account as it does not, despite ‘common sense’ claims to the contrary, represent a debt analogous to that of a household, business or bank debt. Instead the central bank should watch intently for signs of inflation – of which there are few at present in our struggling economies – as its overarching guide for money creation and taxation levels. Taxation both destroys money – by removing it from circulation – and gives it value – as only a national currency is ever accepted in payment of taxes. Once it is understood that money can be safely issued by a central bank without repayment of capital and interest and does not have to be first borrowed in the bond market or raised in taxes (yes, that means given free) new policy options open to tackle unemployment and inflation – not forgetting resource peak and climate change.
Furthermore, MMT suggests that, instead of making liquidity available to the banks, the ECB could just as easily and probably more safely, give it directly to member state governments. It can write a metaphorical cheque for immediate and annual distributions of for instance, 10% of GDP on a per-capita-basis to pay down member state outstanding debts. It should, at the same time impose national deficit ceilings sufficiently high to promote desired levels of aggregate demand.
This positive attitude to government deficits is another counter intuitive aspect of MMT compared to conventional analysis and goes beyond promoting deficits to counter liquidity traps in a depression. Once you accept that all non-government money i.e. bank money is matched by liabilities it follows then, for the private sector to net save, the government has to be in net debt. Even though a sovereign government does not have to sell bonds to raise money, MMT tells us it should still do so to a certain extent, in order to provide secure interest-bearing saving vehicles for its citizens.
Another important policy of most MMT economists is the Job Guarantee, i.e. that the government should act as an ‘Employer of Last Resort’. A job guarantee is a permanent job offer from the government to all citizens of a certain age who are ready, willing, and able to work, for a basic wage. Some MMT economists suggest that the ECB could directly fund a Job Guarantee Programme in Ireland and in any other EMU state that requested it. Or if general EU agreement cannot be got, a national government could fund a Job Guarantee out of their allocation of EEB issued liquidity.
The banks of Member States would still benefit from an ECB directly or indirectly funded Job Guarantee as the newly employed lodged their salaries in their accounts and paid off their mortgages. The exchequer would benefit as people came off social supports and paid income and indirect taxes out of their wages. The resulting increase in circulating money would transfuse the economy to provide the confidence that is so lacking and which no amount of direct liquidity injection into the banks appears to be able to create.
The Irish Environmental Pillar contends that the jobs provided in the Job Guarantee programme should ideally be Green Jobs and should address the most important challenges of our time : resource peak- especially fossil fuels, climate change and biodiversity loss. In addition to the obvious need to tackle these issues, a Green Job Guarantee programme would have no real impact on the public or private sectors as these environmental resources and systems are not yet priced (i.e. are accounted as externalities) in the marketplace.
Who will Present Papers at “Learning from the Crisis” Conference?

In “Learning from the Crisis” US based MMT economists from the University of Missouri, Kansas Dr. Randall Wray, Dr. Stephanie Kelton and Roosevelt Scholar, Marshall Auerback will present and debate Modern Monetary Theory and the Job Guarantee Programme with participants and fellow presenters Richard Douthwaite and David Korowicz from Feasta; The Foundation for Sustainability, and Prof Gerry Hughes from TCD Pension Policy Research Group, Sinéad Pentony and Tom McDonnell from TASC and Michael Taft from Unite Trade Union.
The conference is free and open to anyone whose mind is also open.
Email Alex at TASC to book your place : aklemm@tascnet.ie

Other economic commentators have framed possible responses to Ireland’s debt crisis in very narrow terms, advocating either a rigorous adherence to austerity programmes or unilateral default on our debt.

Those who promote austerity however have not been fully honest about the risks of this approach. They include the possibility that the Irish economy could enter into a spiral of deflation, economic stagnation and experience a sharp increase in overall levels of unemployment. Given the fragile state of the global economy, these negative trends could prove very difficult to reverse.

Those who support a unilateral default on our debts and taking a chance with the international money markets are being less than honest about the economic and financial difficulties that Ireland will face in such circumstances.

Michael Casey’s helpful contribution to this debate has been to remind us of the unique position of central banks which he points out can “create new money by the stroke of a pen”. Casey proposes that the Irish Central Bank should be permitted to print new money and lend it to the cash-strapped Government in order to relieve current pressure on it. This sets him apart from many other economic commentators who appear to view governments as almost completely dependent on private bond markets to access critical money supplies.

Casey points out that over the years, the Central Bank has occasionally lent money to the government of the day to part-finance its fiscal deficit, and that the central banks of other countries have engaged in similar action. He envisages circumstances in which the Central Bank might lend €3 billion a year, for example, to the Government over the next four years, on a strictly emergency basis. He argues that this would prevent recession becoming entrenched, reduce unemployment and emigration, avoid punitive interest charges and protect the most vulnerable in our society.

While Casey concedes that printing money might cause price inflation later on, he questions whether that would be such a bad thing, given Ireland’s present circumstances. He suggests that it might encourage consumer spending and would also inflate away some of the real burden of our present debt. He reminds us that other countries have done this in extreme situations.

Given Casey’s impeccable economic credentials as former chief economist with the Central Bank and board member of the International Monetary Fund, surely his proposal should be given serious consideration by national and European policy-makers?

Casey is not alone in advocating a more flexible approach on the part of central banks to monetary policy. A pioneering community of economists in the University of Missouri, Kansas have elaborated a new macroeconomic model known as Modern Monetary Theory, which challenges some of the basic assumptions of conventional monetary theory. It advocates a more activist role for governments and central banks in overall economic development and the promotion of full employment.

These economists will be amongst the keynote speakers at a conference in Croke Park on May 9th entitled “Lessons from the Crisis : Money, Taxes and Saving in a Changing World” co-hosted by Tasc (Think Tank for Action on Social Change) and Smart Taxes (Fiscal Policy for Sustainability network). Richard Douthwaite, an Irish economist who has written about the possibilities for the European Central Bank to use its monetary policy to engage in ‘deficit easing’ in order to tackle the debt crisis in the Eurozone, will be another speaker at the conference. Those interested in attending can register at contact@tascnet.ie.

Yours etc

Deirdre de Burca

The decision by the incoming Spanish Presidency to prioritise the implementation of the EU Citizen’s Initiative which is outlined to in the Lisbon Treaty is very welcome. This initiative is an ambitious one. The EU is a trans-national democracy consisting of 27 Member States with differing political cultures. The effective implementation of the initiative could contribute over time to a necessary enrichment of the concept of EU Citizenship. It also has the potential to play an important part in addressing the ‘legitimacy’ problems faced by the EU. These problems stem to a large extent from a common perception amongst EU citizens that there is an entrenched democratic deficit at the heart of the way in which the Union functions as a political system.

The successful implementation of this citizen’s initiative, however, cannot be taken for granted. I will begin my submission by outlining some general proposals concerning the possible implementation of the initiative. Were the Commission to adopt these proposals, I believe that the possibility that the EU Citizen’s Initiative would realise its potential as an important instrument to strengthen the ‘democratic fabric’ of the Union could be greatly increased.

Submission proposals

My proposals concerning the Citizen’s Initiative are as follows:  

(i) EU Citizenship Unit

A special unit on EU Citizenship should be established within the Commission over the next year or two. Responsibility for most aspects of the operation of the Citizen’s Initiative should rest with this unit.

(ii) Information and public awareness campaign

The operation of the EU Citizen’s Initiative has little hope of success unless its launch coincides with a properly planned and resourced information /public awareness campaign about the initiative aimed at citizens across all Member States. This public awareness campaign should be managed by the Commission.

( iii )Engagement of national governments and parliaments

The governments and national parliaments of the Member States have a critical role to play in ensuring the effective implementation of the EU Citizen’s Initiative. The cautious response to date of some of my own fellow national parliamentarians to the proposed implementation of this initiative suggests that there is a need for the Commission to act in order to engage national governments and parliaments with the Citizen’s Initiative, and to encourage their co-operation with its effective implementation. This could involve prioritising discussions on the Citizen’s Initiative at both the level of the European Council and at relevant Council of Ministers’ meetings. Furthermore, a formal commitment could be sought from Heads of State, Prime Ministers and relevant government ministers that adequate resources will be made available by Member States to enable, for example, acceptable national verification procedures to be established for citizen’s signatures that are collected as part of the initiative.

(iv) EU Citizen’s Initiative Task Force

While the timeframe that has been given to the Commission for advancing proposals concerning the EU Citizen’s Initiative is relatively brief, it is important that sufficient time and attention are given to some of the problems/challenges that might arise in relation to its implementation. It would seem sensible for the Commission to form an EU Citizen’s Initiative Task Force or Working Group, to tease out the many practical issues, and even ‘unintended consequences’ that may arise as a result of the implementation of the initiative. This group could include Commission officials, representatives of civil society, national and European parliamentarians, experts from jurisdictions where citizen’s petitions/initiatives are in operation, and internet/social media experts. This group could ‘stress test’ the likely operation of the initiative and ensure that most possible scenarios have been anticipated, and planned for. This should help to avoid any serious problems when the initiative is eventually launched.

(v) EU Citizen’s Initiative website

Citizen’s expectations with regard to this new initiative will need to be carefully managed. This can only be done by providing them with full information and explanation about the use of petitions/citizen’s initiatives in other jurisdictions, the perceived strengths and weaknesses of these initiatives, the parameters within which an EU Citizen’s initiative can be framed, the issue of the admissibility of citizen’s initiatives and the role that the Commission, Council of Ministers and EU Parliament will play in the eventual adoption of the requested legislation. In fact, this will provide a very useful opportunity to educate citizens about the respective roles of the various EU institutions and the competences given to them across different policy areas by the EU treaties etc. This will require a well-designed website to be developed which is dedicated to the EU Citizen’s Initiative and that will provide all of the necessary information for those interested in participating in an initiative. Innovative approaches could be used to communicate some of this information and to avoid a ‘text-overload’ on the website.

(vi) Use of the internet and online communication

Considerable awareness now exists of the skilful way in which US President Barack Obama used the internet and online communication to engage a significant section of the vast US electorate in his presidential campaign. The same potential exists in relation to the use of the internet and online communication to engage EU citizens with the EU Citizen’s Initiative process. This potential should be fully exploited in the way that the initiative is rolled out across the Union.

Green Paper on the EU Citizen’s Initiative – Answering the Commission’s  questions

1. Minimum number of Member States from which citizens should come

I believe the option of one third of Member States is a sensible one. It avoids the otherwise likely scenario where citizen’s initiatives would be launched by a bloc or “geographical subsystem” of Member States (ie the Central and Eastern European Member States, the Northern European States, the Southern European States etc). The citizen’s initiatives launched by these blocs could be seen as advancing their own particular interests rather than those of the Union as a whole. The requirement that citizens from at least a third of Member States participate in an EU Citizen’s Initiative makes this less likely in my opinion.

1. Minimum number of signatures per Member State

I consider that 0.2% of the total population of each Member State is an appropriate threshold, is sufficiently low not to discourage citizens from organising themselves and yet is high enough to represent an acceptable percentage at a European level.

3.  Eligibility to support a Citizen’s Initiative – minimum age

I believe that the launch of the EU Citizen’s Initiative offers a unique opportunity to try to engage more young people in European politics and in an emerging European public space. For that reason, although I do recognise the convenience of limiting participation in the initiative to those who are of voting age for the European Parliament elections in each Member State, I believe that the age at which citizens should be entitled to take part should be set at 16 years.(In the interests of reassuring those who might be concerned about the possibly disproportionate impact of non-voting 16 year old citizens on legislative proposals emerging from the EU Commission, it might be possible to specify that the signatures of 16 and 17year olds should not amount to more than a given percentage of signatures gathered within any Member State).It is important to point out that under my proposal, 16 and 17 year olds would not be given the right to vote for elected representatives, but rather to try to exercise an (albeit) limited influence on the legislative agenda of the Union within the parameters set down by the Treaties. I do understand that the governments of many Member States may be unwilling to support this as it may create pressure to introduce something similar at a domestic level. However, on the other hand it would indicate that the new and evolving political system that is the EU is offering innovative forms of political engagement to young people who cannot access such opportunities under most of the more traditional national political systems.

1. Form and wording of a Citizen’s Initiative

I believe an initiative should require that the subject matter and objectives of the proposal on which the Commission is invited to act should be clearly stated. I don’t believe that citizens should be obliged to state these using legal terminology or phrasing. This can be done at a later stage by the Commission once the initiative has been deemed to be valid.

1. Requirement for the collection, verification and authentication of signatures

The eventual success or otherwise of the European Citizen’s Initiative will largely stand or fall on the effectiveness and transparency of the collection, verification and authentication of signatures. I wish to make a few short points in this regard. Firstly I believe that full harmonisation of procedural requirements at EU level would not be practical. However I believe that Member States must solemnly commit to putting in place effective and transparent collection verification and authentication procedures and that these should be subject to regular audit by an independent body. Citizen should be able to support a Citizen’s Initiative online. However, security and authentication features should be built in to the process, whether this involves the use of social security numbers, passport numbers and other personal identification markers. The process should not be so easy to complete that it encourages those who have little interest in the content of the initiative to add their signature mischievously or fraudulently. Given the geographical size (and growing) of the European Union, it is inevitable that online debate and communication will form an important element of any European public space. The operation of the EU Citizen’s Initiative should recognise this fact.

1. Time limit for collection of signatures

I believe that a time limit of one year for the collection of signatures is acceptable.

1. Registration of proposed initiatives

I believe the mandatory registration of proposed initiatives is necessary. This could be done through a specific website provided by the Commission. I also agree with others who have suggested that the admissibility of the proposed initiative should be established at an early stage before the time-consuming process of collecting signatures is entered into. I also believe that the Commission’s responses to the proposed initiatives should be made available on the website. Complete transparency will be very important with regard to the citizen’s initiative process and others wishing to participate in such initiatives may learn from the experiences of others through access the information on the website. In the event that a citizen’s initiative results in the successful adoption of the legislation requested, this could be recorded on the website. Successful participants could be interviewed on video and share their experience with other interested parties.

1. Requirements for organisers – transparency and funding

I believe that organisers should be required to provide information on the support and funding they have for an initiative. I believe that in the case of any Citizen’s Initiative that is submitted, there should be a named sponsoring organisation or individual who can liaise with the Commission regarding any aspect of the initiative. I believe there should also be full transparency requirements around any funding connected with the initiative and the campaign surrounding it. It is not clear whether this could be done at a national level with the appropriate bodies or whether it would need to occur at an EU level.

1. Examination of Citizen’s Initiatives by the Commission

I believe a clear timeline should be set for each stage of the Citizen’s Initiative process, outlining maximum time periods within which certain actions had to occur. The process should not be open-ended or at the discretion of the Commission or any of the other EU institutions. There should be clarity and certainty for participating citizens about what they can expect to happen and within what time- frame.

1. Initiatives on the same issue.

I believe it is appropriate to introduce rules to prevent the successive presentation of Citizen’s Initiatives in relation to a particular issue, as long as the issue is very particular and well-defined. There is a danger that in relation to a wide-ranging policy area such as Climate Change, it would be unreasonable to exclude legislative proposals that sought to tackle the problem but using very different means or legislative approaches. Therefore I think the rules draw up in this area need to be  qualified somewhat as a rigid interpretation might exclude very worthy and legitimate legislative proposals.

The citizens’ initiative is a very important development and those of us who encouraged a “Yes” vote to the Lisbon treaty pushed it to reassure many people who feel the European Union does not listen to them and that they cannot influence its decision making or policy agenda. We made a case that the citizens’ initiative will be an important mechanism to help them have their voice heard and try to influence policies emerging from Europe. I am delighted to see the quick movement on this; the Lisbon treaty was ratified recently and already we see early movement on rolling out the citizens’ initiative.

It was mentioned that perhaps we should stop focusing on what national governments will do and focus on other matters. However, national governments and parliamentarians will play a very important role in selling this because, as Deputy O’Rourke stated, citizens will not instantly be out celebrating this on the streets. They will have to be persuaded. We are all in the business of persuading them because it is in all of our interest to try to ensure that citizens feel more engaged with the European Union and with the decisions being made at European level that affect our day to day lives.

I understand why people feel cautious. Some people here are concerned that perhaps it will lead to unrealistic expectations. Expectations will have to be managed but we must start by approaching this with a degree of enthusiasm and seeing its potential. We are very good at speaking about the need to innovate and be creative. In this instance, it will be quite a challenge to come up with a mechanism that will work in 27 member states, engage citizens, use electronic media and try to engage younger people. It will not be agreed overnight but how we approach it and a degree of enthusiasm on the part of the people to whom most citizens listen, namely their national parliamentarians, will be important.

I hope we will all approach this by considering how we can make it work. Already, organised civil society throughout the European Union tries to influence policy. Those groups which are already quite well-organised will be delighted with this. The challenge for us is to try to involve other citizens who up to now have not really been that engaged with debates at European level. We need to be as positive as we can be.

Electronic media will have an important role. Barack Obama’s campaign has been mentioned. He tapped into the potential to communicate with voters individually and personally. It seems to me that the success of his campaign across the huge continent of the United States offers us hope that this initiative can be successful and can reach people. It will not be straightforward, however. We will have to examine some of the problems mentioned by other speakers. It is possible that people will get roped in to signing up electronically to an initiative without having any understanding of what it is about.

I am strongly in favour of allowing people aged 16 and over to participate in the citizens’ initiative. Young people are falling away from formal politics. The citizens’ initiative does not offer 16 year olds the right to vote, as to do so would interfere in the sovereign matters of individual member states. However, it encourages them to get interested in policy debates that are taking place at EU level and to lend their support to new policy initiatives that are emerging. I hope we can continue to put pressure on the Commission to consider including those aged 16 and over in anything that is agreed under the citizens’ initiative.

I am delighted that European Movement Ireland is as positive as it is about this initiative. I hope we can all be part of trying to make it work and rolling it out across the Union over the coming year or so.

Senator Coffey spoke to the Minister about what constituted good law. Good law is law that is not undermined by the creating of significant exemptions or exceptions. It is about applying the same standards to everybody and not allowing for self-regulation where it is not appropriate to do so. This legislation is informed by the principles of animal protection. It puts strong provisions in place to ensure dogs, in particular dogs bred in establishments, will be treated humanely. That is to be welcomed. Therefore, the Bill is very good law.

I am personally very happy to see the Bill introduced because in my constituency, as most people will be aware, there was a high profile case in June 2007 in which a puppy farm had been discovered in south Wicklow in which 76 dogs, many of them pups, had been kept in absolutely appalling conditions. Some 16 of the dogs had to be put down. The health problems found among the dogs rescued included flea and lice infestations, mange, cataracts, overgrown and diseased teeth, bone problems, ear infections, mites, mammary tumours, dietary problems and so on. The puppies had been housed in dreadful conditions with no access to food, water or light. The case was not an isolated one. I know of other incidents identified in recent years in counties Down and Carlow and elsewhere.

The breeding of dogs on the cheap is a grim and shameful industry. Obviously, the objective is to produce cheap, poor quality, pure bred dogs, mass produced by the hundred, usually in cages and kept in appalling conditions. One journalist referred to it as pet production, battery cage style, a very apt way to describe it. The intention is to sell on the dogs on pure bred designer puppies. In a business that is tax free these activities have made it an extremely lucrative industry that provides high profit margins for those involved in breeding dogs. It is estimated that pups are now being sold for approximately €400 and that up to 1,000 puppies a week are exported from the Republic. Unfortunately, most farmed puppies are sold over the counter in pet shops or through advertisements on websites or in newspapers, in which only the mobile number of the owner is given, with the result that the buyer never becomes aware of the appalling breeding conditions in which the puppy was produced.

There is a clear need for licensing and inspection measures to tackle cruelty on dog breeding farms, to bring proper policing measures to these establishments and to provide the necessary powers for the relevant authorities and agencies to ensure they can take action. This legislation is part of the process of bringing Irish animal health and welfare legislation into the 21st century. The Minister, Deputy Gormley, referred to other animal welfare legislation that the Minister for Agriculture, Fisheries and Food is in the process of preparing. Major strides forward in animal health and welfare protection will be made when that legislation is introduced.

The Bill gives a legislative basis for the regulation of dog breeding establishments. As others have said, many dog breeding establishments throughout the country operate in an extremely responsible way, which must be recognised and acknowledged. These establishments have nothing to fear from the implementation of this legislation. I acknowledge that the Minister, Deputy Gormley, in drawing up legislation attempted to exempt certain organisations from any undue financial burden that might be presented to them, but this legislation is fair and provides an important legislative basis that will allow, as others have said, for subsequent regulations to be introduced in a number of key areas.

The legislation provides for an increase in the dog licence fee. This will go some way towards resourcing a system that is currently seriously under-resourced. It is proposed to increase the licence fee from €12.70 to €20. The Minister referred to the fact that An Post has increased its administrative fee to €3.50. This will leave only €9.20 per licence fee collected by local authorities to provide for the funding of the dog warden service. In 2008 the income derived from the dog licence fee for all local authorities was €2.6 million, while their combined expenditure on dog-related activities was €5.7 million, which left a shortfall of more than €3 million. Increasing the licence fee to €20 will increase to €4.1 million the income derived from the licence fee for local authorities, which will reduce the shortfall to only to €1.6 million, but there will still be a shortfall.

The legislation, to which the Minister did justice in his outline of it, introduces the need to register breeding establishments with the local authority. Existing dog breeding establishments will have three months from the commencement of the Act to register or otherwise they will be in breach of it. The legislation also requires minimum standards to be adhered to in such establishments. Within nine months of the commencement of the Act local authorities must arrange to carry out an inspection of registered establishments which, in the meantime, can continue to operate.

The legislation also requires the introduction of microchipping of all dogs, to which other speakers referred, commencing with those resident in dog breeding establishments. To enable the making of effective regulations in these areas, this legislation was required.

Some Members opposite referred to shortcomings in the consultation that occurred on the preparation of the legislation. I have no doubt the Minister’s response will make clear the extent of such consultation. In drawing up the Bill and regulations, I am aware that the Minister’s Department consulted the Department of Agriculture, Fisheries and Food and the veterinary expertise available to local authorities through the City and County Managers’ Association. The draft guidelines the Minister supports are based on advice from the Irish Society for Protection of Cruelty to Animals. Others consulted included the Hunting Association of Ireland and Animals Need a Voice in Legislation or the ANVIL group. In addition, the working group that was set up received numerous submissions as part of its responsibility to prepare recommendations on the management of dog breeding establishments for the Minister.

I recommend this legislation to the House. It is long overdue but good legislation. This Bill provides a sound legislative basis for the regulations that need to be introduced in key areas. I draw the Minister’s attention to a submission I received from the Dublin Society for the Prevention of Cruelty to Animals in the past week or two comprising some last minute proposals it put forward to the final draft of the legislation. One proposal is a suggestion on the age at which dogs should be microchipped and another calls on the Minister to ensure that the guidelines on the operation of dog breeding establishments are put in place prior to or on the enactment of this Bill. The guidelines, to which the society referred, are on the duty of care to animals, including dogs and dog breeding establishments. I commend the passing of this legislation to the House.

I welcome the opportunity to speak about the EU citizens’ initiative because it was highlighted during the Lisbon treaty referendum campaign as a very positive development. The Lisbon treaty contains many provisions that make the concept of European citizenship more meaningful. It is important, therefore, that we are seen to act on them quickly. The citizens’ initiative will take time to introduce, but it will engage people and make them realise that while there is a democratic deficit, of which I have been critical for a long time, it is possible for citizens to influence the decisions and legislation emerging from the European Union and that we are putting in a place a mechanism for doing so. Even though it is important that we do this quickly, it is also important that we think it through properly because it is quite ambitious. We are talking about a transnational democracy, 27 member states – a number which will possibly grow – with different electoral systems and political cultures and so on.

I attended the meeting last night in European Union House addressed by Proinsias De Rossa, MEP, Professor Brigid Laffan and so on. It was very interesting. Professor Laffan spoke about unintended consequences. That is always a difficulty with anything new and innovative that is being launched. I have no doubt that in regard to the citizens’ initiative, there will be unintended consequences. For that reason it probably would be a good idea, within the time constraints, to set up a task force consisting of parliamentarians but also civil servants and representatives of civil society, particularly those involved in social networking. The points being made about the collection of signatures and so on and on-line communication in relation to the initiative are important. We must consider the most practical way of organising signatures in support of a particular initiative. We should have representatives and persons who understand how the social networking media work brainstorming and stress-testing the concept to assess what might and might not work and identify potential pitfalls in what is being proposed. I recommend that such a task force be set up rather quickly.

The Commission’s Green Paper poses many practical questions in regard to the citizens’ initiative concerning the collection of signatures, the number of member states involved and so on. I accepted the idea that signatures should come from at least one quarter of the member states, but in the debate last night the point was made persuasively that if that was to be the case, given the number of member states, one could end up with what Professor Laffan called a geographical sub-system, under which a small number of member states from the north or south of the European Union could come together to bring forward an initiative that represented particularly the interests of that part of the Union. By increasing the required number of member states to one third, one could get around this issue because it is unlikely that an initiative would be brought forward that represented only the interests of a particular section of member states or citizens within them. Therefore, it would be worth looking at the idea of raising the threshold to one third of member states.

It is also important, even though there will be well over 1 million signatures in support of most citizens’ initiatives, that there be a sponsoring organisation because there will be much liaison between the Commission and those sponsoring an initiative in trying to define terms and clarify various issues. If that is the case, the issues to which Proinsias De Rossa referred such as making a declaration of interests and so on could be easily established and, perhaps, form the agenda of the organisation spearheading the campaign. I recommend that this be part of the way the process will works.

In the debate last night there was talk about admissibility which people at this meeting have referred to as registration. It is important that early in the process there be an opportunity for those who want to get involved in a citizens’ initiative to put a wording together and submit it to a body which would determine whether it was acceptable. There is a danger, once this process is launched, that people will believe they can submit citizens’ initiatives on any issue. Obviously, there will be clear limits. It has been pointed out that initiatives must be in keeping with the objectives set out in the treaty. The early determination of this is important to ensure people will not go to the trouble of organising campaigns and collecting signatures only to be told at the end of that process that their petition is inadmissible.

National authorities will have an important role to play. The verification of signatures is probably the most important work they will do. If there is no agreement in advance on the part of national governments that they are prepared to take on this role and that there will be funding to meet the practical resource implications, the initiative will not work as intended. As I mentioned, there is a need to look at the electronic collection of signatures. It will be a missed opportunity if we do not factor this in in the way the process will work.

Reference has been made to 16 years old and whether those below voting age across member states can participate. I certainly would be in favour of this, as we have a problem in engaging young people. We are not talking about giving them the right to vote, but we are extending to them an opportunity to influence the legislation which emerges from the institutions of the European Union. It would be a good way of engaging young people who are very active through the social media and so on with the European Union and politics in general. This issue should be looked at.

The question of the involvement of the Diaspora is pertinent. What is to be done about Irish people living in another member state or Polish people living in Ireland and so on who want to be part of a citizens’ initiative? We have to look carefully at this issue. In general, I welcome the citizens’ initiative. The more we can raise the level of public awareness of the process in the coming months in advance of the submission date the better because we want people to start availing of the initiative process as soon as it is agreed. December 2010 is the proposed date of adoption of the regulation.

I regret only 45 minutes has been provided for the debate on this motion. As the Minister of State is required to open and close the debate, this leaves little time for representatives of all political parties to make statements on this important body, the structure of which will have serious implications for internal security policy within the European Union. I believe 45 minutes is a short time within which we must discuss the establishment and remit of the committee.

Under protocol 21 of the Lisbon treaty, Ireland has discretion to opt-in, in so far as it sees fit, to the communitarian approach to justice and home affairs, which is to be welcomed. We have provided ourselves with much flexibility in this regard. I note the incoming Spanish Presidency has stated it will give priority to the development of internal security strategy which will come within the remit of the new committee. It is important that Ireland is from the outset a member of the new structure when the Spanish Presidency is developing policy in the area of internal security. We are told the main objective of COSI will be to facilitate, promote and strengthen co-ordination of the operational actions between EU member states in the field of internal security, including police and customs co-operation, external border protection and judicial co-operation in criminal matters relevant to operational co-operation in the field of internal security. We are told also that the committee will regularly report on its activities to the Council and shall keep the European and national parliaments informed.

COSI will be responsible for evaluating the general direction and efficiency of operational co-operation and will also have the responsibility of identifying possible shortcomings and adopting recommendations to address them. COSI, with the Political and Security Committee, will be mandated to assist the Council to implement the solidarity clause which provides that the EU shall be able to mobilise all the instruments at its disposal to help a member state that is the object of a terrorist attack or the victim of a natural or man-made disaster, which is an important power. It is important that Ireland, because of its unique position as a neutral state within the European Union, ensures that the implementation of the solidarity clause is worked out in a manner that is acceptable to us and the values which underpin our neutrality.

I have a number of concerns to which I hope the Minister of State can respond. Several interested parties have raised with me the composition of COSI. Will the committee merely be advised by agencies such as security and intelligence agencies like Britain’s MI5? In other words, will these bodies be members of the committee or will the committee merely be advised by them? Perhaps the Minister of State will respond to that issue. On the European and national parliaments being kept informed of the proceedings of this committee, will the level of information provided to the parliaments make meaningful scrutiny possible? As far as I am aware no provisions have been set out in terms of scrutiny and accountability. Can the Minister of State assure us that there will be public access to its proceedings and documents? My third concern relates to the concept of internal security. Members will be aware that this concept is much wider than policing, judicial co-operation and immigration. It encompasses all matters relating to the maintenance of law and public order and to civil and military capabilities. Obviously there is concern in regard to the incredibly strong link that will be required between internal security within the EU and external security. Can the Minister of State offer any reassurances with regard to the definition of that concept and the remit of the committee as a result?

At a time when the new EU 2020 strategy is being drawn up there is a sense of optimism and concern that the same fate might await that new strategy as affected the Lisbon strategy which, despite its stated objective to ensure the European economy became the most competitive and dynamic economy internationally, was seen to be largely a failure. Will the Minister reassure us that the new strategy, EU 2020, has a better chance of success? The Lisbon strategy was being implemented at a time when the global economy was prospering and the individual economies of member states were in growth. Should we be any more hopeful that the EU 2020 strategy can be successful at a time when most of the EU member states are in economic recession?

Citizens’ rights and freedoms were mentioned by the incoming Presidency as a priority. I notice the European Parliament asked the Council to engage in inter-institutional dialogue on the new legal framework required for access to documents, which is very close to the heart of many citizens. The Lisbon treaty changed the situation by broadening the scope of the requirement for access to documents to include the European Council, the European Central Bank, the European Court of Justice, Europol and Eurojust. There is a short timeframe within which the new regulations on access to documents have to be drawn up and the European Parliament is seeking immediate inter-institutional dialogue on this, particularly on the principles that will surround any restrictions on access to documents. Will the Minister, Deputy Martin, and the Government support this immediate inter-institutional dialogue?

The Minister mentioned the situation in Haiti and it is true that there has been a strong international response, albeit a little belated. The United States is seen as playing a very strong role in this. Unfortunately, the European Union has not been mentioned and there has been no strong European response while individual member states are doing their very best and the Irish Government has made its contribution to the relief and humanitarian effort. Does the Minister feel there is need to operationalise some of the new provisions of the Lisbon treaty, particularly with regard to the formation of the EU voluntary humanitarian aid corps? In a future humanitarian crisis it would be very welcome to see the European Union being able to mobilise the same type of civilian resources as the US and other major powers. What steps can be taken in this regard?

The committee has organised a meeting with a number of Irish MEPs tomorrow to discuss the citizen’s initiative. A public consultation process is in train on this at present. Will the Department play a role in raising public awareness about the citizen’s initiative and seek public input into its design and workings?

Senator Déirdre de Búrca:  I raised the question of access to documents requested by the European Parliament. What will the Minister do in respect of this matter?

Deputy Micheál Martin:  We will examine that in terms of the European Parliament. Certainly, we support inter-institutional dialogue in terms of access to documents.

The Bill is timely because there is an increasing convergence between telecoms and broadcasting resulting in significant innovation in these premium rate services. There are subscription media services on mobile phones, interactive gaming on television and even entire television channels based on premium rate calling. There are also significant business applications for premium rate services. In Ireland we are all familiar with unique prefixes relating to the premium rate services: 1530, 1540, 1550, 1559, 1560, 1570 and 1580. The 1559 prefix is dedicated solely to adult services and can only be accessed with a PIN issued by a network operator. Calls to premium rate services cost more than ordinary telephone calls and each prefix has a specific call cost. The role of regulation is important. Others have referred to this. One of its important purposes is to prevent consumer harm, in particular to ensure clear and accurate pricing information is provided along with honest advertising and service content. This Bill will accomplish this by ensuring the new regulatory system includes those strong consumer provisions.

In earlier days it was much more common for premium numbers to be used fraudulently. Computer criminals have used premium rate numbers to defraud unsuspecting Internet users. As we know, many more children and young people are using the Internet, which makes them vulnerable to this type of fraud. One particular scheme involved encouraging users to download a programme known as a “dialler” which surreptitiously dialled a premium rate number, accumulating charges on the user’s phone bill without his or her knowledge. Another premium rate scam involved television programming that encouraged young children to dial a number, relying on the assumption that they would be unaware of the charges to be incurred.

In Ireland, premium rate telephone services have been regulated by Regtel, an independent non-profit company formed in 1995. It operates through a strict code of practice with which all service providers in Ireland must comply. Regtel has been required to assure consumer protection when using national or international premium rate services and has put in place procedures to deal with consumer complaints that arise from the use of these services.

The Bill provides for the transfer of the function of the regulation of premium rate services from Regtel to the Commission for Communications Regulation, ComReg. It also provides for certain other amendments to the overall communications framework. The transfer of the regulatory function to ComReg will ensure an effective regime that addresses the present market environment is established and this is in accordance with Government policy on agency rationalisation. The legislation enables ComReg to license the premium rate services by specifying the classes or types of premium rate services that require to be licensed, the terms and conditions that may be attached, and the information that premium rate service providers must provide to ComReg upon request. Significantly, it also deals with the issue of offences and penalties. The Bill provides the necessary investigative powers to ComReg to ensure the conditions of a licence are being complied with. ComReg will be empowered to revoke, amend or suspend a PRS licence with immediate effect, if necessary, where it finds that the holder has failed to comply with a licence condition. It also provides for summary and indictable offences relating to the provision of unlicensed premium rate services and summary offences for overcharging for services or charging for services not supplied. A service provider aggrieved by a decision of ComReg to refuse to grant or revoke, amend or suspend a PRS licence will have the right of appeal to the Circuit Court.

Significantly, too, the Bill provides that ComReg will, in consultation with the industry and other interested parties, prepare and publish a code of practice to be followed by premium rate service providers. Compliance with the code of practice will be a condition of the licence.

I have mentioned that the legislation makes some other changes to the communications infrastructure. Having been a member of a local authority, I particularly appreciate the fact that this Bill amends Part 5 of the principal Act of 2002 to facilitate the National Roads Authority in making ducting infrastructure on national roads and motorways available for fibre roll-out. This will facilitate the roll-out of fibre throughout the country to provide broadband connectivity, one of the priorities the Minister has emphasised his Department will pursue. This legislation will facilitate us in developing the communications infrastructure which will help achieve that objective. Under the principal Act, local authorities were the sole consent-giving authority for local, regional and national roads as well as motorways. This amendment in the legislation before the House designates the National Roads Authority as an authority for national roads, which includes motorways. This will enable the National Roads Authority to make available to network operators access to the ducting on national roads and motorways to facilitate the roll-out of high-speed fibre networks in the regions.

For all these reasons I commend the legislation and I commend the Minister on its introduction. I happily support the Bill.