Ladies and gentlemen, I am delighted to be here with you this morning.
I served for over 8 years as a member of the British Irish Assembly and during that time made some great friendships across the Irish Sea. I want to put on the record my appreciation of the work you do. I genuinely believe that this body can play an important role in developing even further the British Irish relationship.
Indeed, the success of the peace process in trying to make Northern Ireland work on the basis of agreement and non violence, is a genuine international achievement that all mainstream parties on these islands, in government or out of government, can be proud of. The Good Friday Agreement is the historic and binding agreement of this generation. Making it work, inside Northern Ireland, between the North and the South and between both our Islands; is our collective responsibility. It is a British Irish project that must be nurtured to bring about the ultimate reconciliation between Green and Orange. The Agreement cannot be taken for granted
This body is crucially placed in encouraging governments across these islands to develop the true potential of working together on so many issues of common concern.
Many great Irish people have also graced this Senate chamber –none more so than the great Irish poet, W B Yeats, who was a senator in the 1920s. Former Taoiseach Garret Fitzgerald began his political career in this room in 1965. Former President, Mary Robinson also served with distinction in Seanad Eireann, as did our current President. And of course former Gordon Wilson, the embodiment of true reconciliation, also served as a Senator here in the 1990s.
Being here together in this chamber reminds us of what we all have in common – a tradition of parliamentary democracy, free speech, respect for the rule of law and many other shared political values.
And we share so much more besides. Indeed the most famous Irishman of all, St. Patrick, was born in Britain and brought to Ireland as a slave in the 5th century AD. I don’t think we have ever said ‘thank you very much’ for St. Patrick. So you gave us St. Patrick; and in return we gave you Terry Wogan and many more besides.
Geology and geography have placed our two islands side by side. It was always inevitable that our histories would be both intertwined and entangled. Relationships within Ireland and between our two islands have been at times difficult over the centuries. But they have never been as warm, as mature and as settled as now. We now have the chance to develop what was once described as the “ totality of relationships” on these islands.
The evolving nature of the relationship between London and Dublin was very obvious in the joint statement issued by Prime Minister David Cameron and Taoiseach, Enda Kenny, after their meeting on March 13th.
The statement primarily focuses on the future and looks forward to a decade of ‘renewed and strengthened co-operation between our two countries’. Arising from that meeting a joint study on economic relations is being supervised by the Cabinet Secretary in London and the Sec General of the Taoiseach’s Department in Dublin. The study is expected to identify areas of co-operation and mutual benefit.
All administrations on these islands share similar budgetary and economic challenges and we also share them with many other members of the European Union. These challenges are complex and not open to simple solutions.
There is the problem of accumulated debt brought about by the complacent and in some cases the reckless expansion of credit.
The collapse in economic activity is putting budgets all across Europe under immense pressure. We now know to our cost the failure of light touch regulation to the banking and financial system. Like nuclear reactors when banks implode the fallout is dramatic.
Then what of the debate between austerity and stimulus. And of course what is the most effective balance between taxation and spending? How can the economies of Europe return to a sustainable growth path? How can the trade imbalances within Europe be addressed? And there is the issue of unemployment, particularly unemployment among young people and the need to do everything in our power to get people back to work. To give people the dignity of work.
There is a real danger in many European countries, including our own of a lost generation of young people. I personally believe the issue of inter-generational equity is a real and pressing issue. In difficult economic times solidarity with young people must be at the top of our agenda. The common good and our long-term interest should encourage us to support young people into active employment.
Last year the Irish government introduced a limited internship programme called Jobsbridge. This gives people experience in the public and private sector related directly to their skills. Those involved in Jobsbridge receive unemployment benefit and a small additional payment per week for a nine month internship. This has been reasonably successful and we are expanding it this year. Job activation measures are certainly an area where we can learn from each other – with a clear focus on what works and what doesn’t work.
And there is of course a very big shadow on the horizon – the fate of the Euro. Whether we are members of the Euro or not, we all have an interest in safeguarding the common EU economy.
If I have learned one thing since this crisis began it is this – confidence is critical to banking, to currencies, to economies and to the financial system itself. When confidence drains away no institution is safe.
The Euro, the common currency of 17 countries and 330 million people continues to be pressurised by events. The Euro zone is involved in a protracted effort to retrofit the common currency and make it fit for purpose.
Doing so is like carrying out open-heart surgery on a patient while he is still walking around. I think significant progress has been made and the work continues. But success is never guaranteed. Ireland will have its own decision to make by way of referendum on the Stability Treaty on May 31st.
As politicians must be aware that the economic crisis has undermined trust in politics itself. Dangerous voices and dangerous forces are emerging in Europe once again. We must never take for granted what has been achieved in Europe during the last 60 years.
Just one statistic to remind us – historians have estimated that approximately 80 million people died violently in Europe in the first fifty years of the last century. The Peace Process for Europe - the European Union must continue to have our active support.
The Irish government aim to have a budget deficit of under 3% by 2015. We also aim to have our overall debt levels, as a percentage of GDP on a downward trajectory in the same year.
We have managed to stabilise our banking system and the economy. We are now showing modest growth. We have continued to renegotiate elements of the bailout programme. We have had a measure of success and the work continues, particularly in relation to the burden placed on the taxpayer by the government guarantees given to the banks in autumn 2008.
At the same time a broad based programme of structural reform of the public sector is being undertaken and the government is driving forward a very strong agenda of reform with a particular emphasis on supporting the business sector. Despite unemployment of over 14%, which is far too high, we still have 1.8 million people at work. That’s 800,000 more then was the case 15 years ago.
There is a vast amount we can learn from each other. I have been in contact with colleagues in Northern Ireland and in London to see how we can learn from each other in areas of public sector reform.
In areas like shared services, property management, procurement worth 21 billion euro on the island of Ireland, we have much to learn from shared experience across these islands. Changing how governments provide services and learning from mistakes made and successes achieved, is something that is in all our interests.
Overall between 2009 and 2015 the Irish public service will reduce from 320,000 people to about 280,000. The total pay and pensions bill should reduce by 3.5 billion Euro. Our priority is to keep the front line of police, nurses and teachers in place while reconfiguring the back office staff. Getting through this economic crisis requires fundamental reform of the public sector. It’s an enormous challenge.
Ireland continues to attract a high level of Foreign Direct Investment and this inward investment is contributing to economic stability. Irish exports remain very robust, with a very strong trade surplus. Indeed the value of exports to the UK was up by 15% in January. This trend is probably helped by a weak Euro, as Britain still remains the key market for indigenous Irish companies. The Irish growth sectors include Tourism, Agri/Food and professional services.
Ireland now has a thriving international ICT sector and a very large pharmaceutical/chemical industry, both driven by international companies. The government continues to pursue policies that seek to stabilise the property sector and return that very important sector to a reasonable level of investment and a reasonable level of transactions.
The Irish government also sees growth in the renewable energy sector. On this point I want to refer to the electricity connector between Ireland and Britain, the cable for which is being currently laid.
This is a €600 million project - grant assisted by the European Union to the tune of €125 million and also
supported by a loan of €300 million euro from the European Investment bank.
When people criticise the EU for not supporting growth they should remember projects like this. Indeed as the joint statement by the two prime ministers in March made clear they see renewable energy as an area of enhanced co-operation. New ideas being discussed such as new transmission lines and combining wind energy and hydro storage, must play a part in this debate.
I think if all the administrations on these islands presented a combined renewable energy strategy to the European Union significant new investment might be available. Certainly when Ireland assumes the presidency of the EU during the first half of 2013 we will be pursuing this agenda very vigorously.
There are also some grounds for optimism in Europe. The ECB, under the leadership of Mario Draghi has shown skill and flexibility. In recent days the German Central Bank has raised the possibility of a higher rate of inflation in Germany than the Euro zone average and the German Finance Minister Wolfgang Schauble has indicated that he would like to see significantly higher wage levels in Germany, as a means of boosting demand across the EU.
So there is clear evidence of a shift in emphasis, reflecting the changing political mood across Europe.
The banking situation across Europe continues to be a danger. Financial services are of particular concern to London/Edinburgh and Dublin
We live in uncertain times, both politically and economically. Our ability to predict is extremely weak. We need to consider very carefully how to present policies and manage expectations. We also need to be very cautious of ideologies.
Now is the time for practical common sense solutions. We must be guided by what works.
Luke Johnson writing in the Financial Times last week got it right when he said;
“ There will be no big fixes. Instead governments need to seek pragmatic deals by any means necessary.”
I support that approach.
I am realistic about the challenges facing Ireland, Britain and the European Union but I remain optimistic about the outcome. I believe persistence; determination and hard work will see us through to a better place.
Finally can I say that there is an onus on all Governments, on these island, to maintain a high level of ambition for what the British Irish relationship can achieve. Your role as fellow parliamentarians is crucial in bringing about the potential of that relationship.
As we remember the decade to 1912 to 1922, we are, in a very real way, looking ahead to what relations on these islands might be like in 2022. Let us do that together and with renewed confidence.