Commission budget rules to switch emphasis to government spending – Hayes
Ireland one of the only Member States that can currently afford real expenditure growth
Brian Hayes MEP today (Thursday) said that the European Commission is making attempts to switch the focus of its budgetary and fiscal rules on expenditure benchmarks and Ireland must be prepared for such a move.
“The government must prepare for the European Commission to take a stricter stance on government spending in the coming years. At the moment, the Commission has been mainly focused on ensuring that Member States get their budget deficits down towards balanced budgets. Not as much attention has been placed on government spending rules as long as governments were working towards reducing their deficits.
“Through my discussions with DG ECFIN, the Commission has made it clear that it is now preparing to turn its focus on how much governments spend in line with their potential GDP growth.
“Throughout the financial crisis and up to now the key focus from the Commission has been on the rules that the budget deficit must be below 3 percent and public debt must be below 60 percent of GDP.
“But now the Commission’s emphasis will begin to shift towards the limits placed on government spending, or ‘expenditure benchmarks’, as set out in EU fiscal rules. The expenditure benchmarks are established in line with a country’s potential GDP growth which is calculated over a ten-year period, including the growth rate of the previous five years, the current year and the following four years. 0
“For Ireland, the allowable expenditure growth was set in 2013 based on a 10-year average of potential GDP growth estimates from 2008 to 2017. However, the expenditure benchmark has been increasing as our budgetary position improves. But notably, under the fiscal rules, if Ireland breaches its expenditure benchmark it must match this by additional discretionary revenue measures.
“The enforcement of these expenditure rules are likely to become stricter. There is potential for new or amended legislation to bolster the Commission’s hand at enforcing government spending rules, yet discussions with Member States are still at a very early stage and there is likely to be major resistance to further legislation on budgetary rules.
“Ireland as a small open economy is very susceptible to shocks; this means that our budgetary position is subject to massive changes. We need to prepare properly for the future – no longer can we spend freely when times are good and tighten up when times get bad. We need to be able to put money aside when we have the budgetary capacity to help us in the bad times.
“According to Commission sources, Ireland is currently one of the only Member States that can afford real expenditure growth. But we need to have a good balance between our tax base and government spending. The government is on the right track but needs to be prepared for stricter enforcement of the spending rules in the years to come.”
Know your travel rights before you travel – Hayes
70% of Irish holidaymakers travel to an EU country. Strong laws cover cancelled and delayed flights.
Fine Gael MEP, Brian Hayes has highlighted EU laws concerning flights within the EU and urged holidaymakers to know their rights before traveling. The Dublin MEP also advised holiday makers to ensure they travel with their European Health Insurance Card.
“August is traditionally a very busy time for airlines across Europe. 70% of Irish holidaymakers travel to an EU country. Unavoidable delays will naturally occur. If a flight is cancelled or delayed EU law states passengers must be given a choice between re-routing to your final destination or a refund. Airlines are required to provide passengers with information, care and assistance, and compensation in certain circumstances.”
“Not enough is being done to get the message out especially this time of the year as families head off to the sun. If you are flying from any airport in the EU and your plans are disrupted, you have rights and entitlements under EU law.”
“Airlines are required to inform passengers about their rights. If an airline cancels a flight, they must provide each passenger with a written notice setting out the rules for compensation and assistance. A similar notice must be issued if a flight is delayed by more than two hours.”
“I’m also asking holidaymakers to ensure they have their free European Health Insurance Card before they travel. As an Irish resident you are entitled to get healthcare through the public system in an EU country if you become ill or injured while on holiday. But you must have a European Health Insurance Card or EHIC (formerly known as the E111). New or replacement cards can be obtained through the HSE.”
“As an EU citizen you have many benefits, but it’s vital that people ‘know before they go’. The European Consumer Centre (www.eccireland.ie) in Dublin provides details on all the various European consumer rights” concluded MEP Hayes
Hayes welcomes Central Bank action on variable mortgages
Brian Hayes MEP today welcomed the news that the Central Bank of Ireland would introduce measures that require banks to inform their variable mortgage holders every year about alternative products on offer. These measures were communicated to Mr. Hayes in a letter from the Governor of the Central Bank, Philip Lane, following his calls for simpler switching procedures.
“It is welcome that the Central Bank is carrying out these measures to improve transparency of variable mortgage products. The Central Bank sees that mortgage switching is a vital tool to a well-functioning mortgage market and the more they can do to ensure consumers have the right information about better mortgage offers the better.
“This will be the first time that banks will have to communicate annually a summary of alternative products on offer and publish on its website its policy for setting variable mortgage rates. It is important that this information is communicated to people in a clear and understandable way. Otherwise, customers are often left in the dark about the benefits of switching mortgage products or provider.
“However, I do still believe that the Central Bank needs to develop a specific code of conduct on switching. And I also believe that the government needs to bring in standalone legislation to establish a simple switching procedure, similar to what was done in Italy.
“We must recognise that there is still a great lack of competition in the mortgage market. Variable mortgage rates are still too high. We need to find ways to ensure that foreign banks can come into our mortgage market and compete with the current market players. To develop that competition, I believe that switching must be a key component of our mortgage market. We currently have very low switching rates and this keeps the market less competitive.
“In Northern Ireland there is approximately one mortgage provider per 180,000 people. In Great Britain there is approximately one mortgage provider per 700,000 people. In the Republic of Ireland there is one mortgage provider per 920,000 people. This shows the dominance of the five main lenders in Ireland.
“I believe we need to stimulate a more competitive mortgage lending environment, particularly with a view to encouraging reasonably priced long-term fixed rate mortgage products. In most other Eurozone countries, you can get a long-term fixed mortgage rate of 15 or 20 years for less than 3.5%.
“In Ireland, only Bank of Ireland offers a 10 year fixed rate mortgage. Other than that, there is hardly any competition in the mortgage market beyond rates of a 5-year duration. There is a culture of variable borrowing in Ireland and this will only change if competitive long term rates are available.”
The West heaves a sigh of relief as democracy makes a step forward in Turkey
Opinion piece by Brian Hayes MEP published in the Irish Independent on Monday 18th July 2016
In Turkey, shortly after midnight local time on Saturday, tanks moved onto the streets of Istanbul and Ankara. The sound of gunfire was heard across both cities and military jets streaked across the night sky over both cities. An old-style military coup attempt was under way.
By morning, the coup was effectively over, the ringleaders were rounded up and more than 6,000 people are now detained.
Large sections of the judiciary seem to have been removed as the finger is pointed at Fethullah Gulen and his movement.
At this stage, it’s unclear whether Turkey might reintroduce the death penalty as it faces threats on all sides and from within.
What is most significant from a Western perspective was that all sides in Turkey, be they pro- or anti-President Erdogan, seemed totally opposed to the coup.
It simply didn’t have support from the start.
Turkey remains on a high state of alert as the implications of this coup attempt for the wider security of the region come into sharp focus.
By Saturday morning, when it was clear that the coup had failed, Europe and the West looked on with utter relief. Had this gone the wrong way, the outcome for Turkey and indeed for the delicate balance of power in the war-torn Middle East could have been devastating.
What’s obvious is that the Turkish people want to change their government exclusively by means of the ballot box. It was a test of Turkish democracy and the fact the opposition sided with the government is a healthy sign for the long-term.
That’s not to say that Turkey is a liberal democracy. Nobody can argue that it is. But one unintended consequence of the coup’s failure may well be that it helped to bind the country together in a lasting way.
Yes, of course Turkey must have a strong relationship with Europe, but it must also show that it understands our values of democracy and human rights. Its embryonic commitment to democracy took a big step forward this weekend.
Turkey is too big and too important to the EU for these events not to be significant to all our lives. It’s a regional power player situated between the Middle East and Europe. A type of enormous economic and military buffer. A crucial player in the longer term sustainability of Europe, from the migration issues across the Mediterranean to our collective economy.
The instigators of the coup made a fatal error. They failed to neutralise senior politicians. The president called on citizens to take to the streets to save his government. The streets of Istanbul and Ankara, which had been almost empty, suddenly became crowded with cars and protesters. Crucially for the government, the police appear to have stayed loyal.
Turkey has had a long history of military coups and political interventions by the military. The military sees itself as the guardian of Turkey’s constitution and the secular legacy of Turkey’s national hero, Kemal Ataturk. President Erdogan and his Islamist-leaning AK Party have been setting a different political direction for Turkey.
He is very much in the nationalist authoritarian mould of political leaders.
In many respects, he resembles President Putin of Russia. He has clamped down hard on political dissent and gradually introduced extremely oppressive media controls. These are big issues for the EU.
In recent years, Erdogan has been projecting himself as a regional strongman. Turkey, of course, has serious internal political tensions associated with its Kurdish minority population. The government also took a strong anti-Assad stand, allowing arms supplies and other supports to flow to dissident groups inside Syria. Turkey also allowed its country to be used as a transition route for jihadi fighters from all over Europe. In recent months, Turkey itself has become a target for Isil terror attacks.
As a member of Nato, Turkey has the largest standing army of any Nato country. Of necessity, Turkey is also a partner of the EU in controlling the flow of refugees and economic migrants coming into Europe. Its government has driven a hard bargain with the EU in recent months.
If anything, the failed coup is likely to increase the authority of the president.
The Turkish economy, which is heavily dependent on the tourist sector, will be badly hit by recent events – putting jobs and livelihoods at risk.
The greater risk is that Turkey may be sucked into the wider instability that is now such a feature of the Middle East.
A stable Turkey is of critical concern to the EU. Turkey has a population of 80 million people. If Turkey became destabilised, it would pose a massive danger to the EU and the entire region. Dialogue and deal-making must continue with Turkey.
During the British EU referendum, one of the scares raised was the possible accession of Turkey to the EU. And while Europe will continue to engage on the question of Turkey joining the EU, the weekend’s events have made that even more remote then it was before.
Turkey will not be joining the EU anytime soon.
MEPs call for ‘Street Pricing’ policy in EU airports
Fine Gael MEP Brian Hayes has today (Sunday) called for the introduction of ‘street pricing policies’ across European Airports. The Dublin MEP believes shops and restaurants should be required to charge prices comparable with similar shops on the street. Mr Hayes together with colleagues from across Europe initiated a procedure in the European Parliament requesting action by the European Commission.
“Every year millions of European Citizens are ripped off by the exorbitant prices charged by retailers and restaurants in European airports. The cost of basic items has always been an issue in airports.”
“I believe a fair street pricing policy needs to be introduced. Shops and restaurants in airports have a monopoly. Soft drinks are often €1.50 more expensive, a standard breakfast can cost in the region of €15 and chocolate bars can be 50C or €1 more expensive. I received one complaint where a bottle of water and a cheese sandwich cost €8.20. European travellers are clearly being ripped-off.”
“In the US a number of airports have signed up to a voluntary code of practice on retail and restaurant prices. I believe a similar code of practice should be established by the European Commission with European Airport authorities encouraged to participate. That is why I and other colleagues from all political groups in the European Parliament have requested action on this issue by the European Commission. ”
“If shops on the street sold products at these prices, consumers would avoid them. This is not always possible in our airports. Once you pass through security it can be several hours before you reach your destination. Passengers are effectively forced into paying excessive prices. It is time that a fair pricing policy is introduced in our airports” concluded Mr Hayes.
Why this Dáil may actually grasp the nettle of higher education funding
Article by Brian Hayes MEP published in the Irish Times 14th July 2016
Doing the right thing in Irish politics frequently takes a lot of courage, but just sometimes requires a bit of good luck along the way. Richard Bruton may have stumbled across some good luck in trying to resolve the thorny issue of funding higher education in Ireland. For it is the perennial subject that every Minister for Education kicks into the long grass. Like national pension policy, it is always an issue for the next administration.
And despite the narrative that this Dail cannot or will not make difficult decisions, in a funny way the current composition of Dáil Éireann makes it possible for lasting reform in this area.
Two interesting things happened this week when Peter Cassells published his report.
Firstly Richard Bruton made it clear that the report is now very much the property of the new Education Committee. Because the government doesn’t have a Dail majority, the real influence is now in the Dail Committee rather than around the cabinet table.
The second interesting thing of the week was the very constructive response of Fianna Fáil and especially their new Education Spokesperson Thomas Byrne. Byrne deserves credit for refusing to simply play politics on the issue. And as he rightly pointed out all parties, including Fine Gael, have a duty to state their preference rather than hide behind the report.
Richard Bruton cannot by himself or by weight of parliamentary arithmetic decide this issue. He must work with the new education committee. The fact that the report has been published so early in the life of this Dail is another piece of good fortune.
The danger for opposition figures in education has always been to over promise and that especially is the case in the area of funding for higher education. FF have shown a lot of backbone this week in their response to the Cassells Report.
Eight years ago as the FG Education Spokesperson I set out in a green paper why a new model of funding for higher education was needed. At the time I proposed a graduate tax, where a graduate paid a contribution up to 30% of the cost of their education into a ring fenced fund for higher education. The more expensive a course, like medicine for instance, meant that you paid more. But you only paid when you could afford it.
The contribution was made over 10 years and only after a graduate reached a salary threshold. Crucially that new system got rid of college fees upfront, fees that had nearly doubled over the last eight years. Of course there were problems with the scheme I proposed. But the graduate tax idea is not a million miles away from the student loans system proposed in the Cassells report. In fact over the last decade countries like the UK and Australia have introduced student loans, so we could learn a lot from their experience over that time.
I argued at the time that if we were asking young people to contribute to their education, it could revolutionize the relationship between college and students. Students would correctly demand more from their colleges and lecturers given they would be paying for part of it.
It’s also about time that we recognized that the introduction of free fees in the 1990s has made very little difference in terms of helping students from disadvantaged backgrounds. A new funding solution could do something significant for those poorer students that need more support to get to and stay in college.
The current funding arrangements for our universities and Institutes of Technology is utterly dysfunctional and has to be reformed. We simply cannot go on with more of the same.
The sector is being held together by a financial shoe string and is close to collapse. Looking in from the outside it’s all about numbers. In 1980 20% of the age cohort went to college, now it’s 60%. The highest level of participation in higher education of any member state in the EU.
In my view if a new funding arrangement can be found, it then allows a genuine debate to occur on the type of third level sector we need. Reforms on course quality and content, more student contact hours, helping students from poorer backgrounds with proper maintenance support, demanding that universities collaborate, offering pathways to meet labour force needs in new technologies and emerging business opportunities.
The status quo is not good enough. Simply ratcheting up every year or so the annual third level registration fees is no way to fund higher education and in fact acts as a barrier to entry for many potential students. The real scandal in Irish education is disadvantage, especially at primary level and post primary level where much greater levels of funding are required.
My proposal for higher ed still required a massive contribution from the state, but also a reasonable contribution from graduates who benefit from the education they receive and as a consequence, have much higher earning potential during their life. Peter Cassells also proposed in his report an additional contribution from employers towards the sector – this also should form some part of the overall funding solution.
Post crises Ireland at a political level, must have the capacity and show the willingness to confront problems – rather then run away from them. If we have learnt anything from the crises years it’s the need for honest debate. Politics can no longer be about the lowest common denominator as parties compete against each other in a pretend contest, where pretend options are presented to the electorate. This issue might give us some tangible proof of new politics?
Populism the main stumbling block to TTIP as negotiations enter 14th round – Hayes
EU and US should complete TTIP deal by the end of this year
Brian Hayes MEP today said that the main stumbling block in an agreement on TTIP is the populist positions that many political figures against a deal. Mr. Hayes urged EU and US negotiators to speed up progress and work towards an agreement by the end of the year. The two sides meet in Brussels this week for the 14th round of negotiations.
“We have seen with the result of the UK referendum the damaging effects of populist politics. I hope this gives us a wakeup call in Europe and we can now push ahead with the real jobs and growth agenda. Finding an agreement on TTIP is a key part of Europe’s future growth agenda.
“We should not let populists take a hold of TTIP like they did with the Brexit debate. We need to look at the facts and figures and it is clear that the economic benefits for Ireland and the EU are enormous from a potential deal. A recent EU study says Ireland will gain 1.4% in GDP from the deal.
“EU and US negotiators should speed up their talks and find an agreement before the end of this year. The longer this is allowed to linger on, the more chance that populists will have to hijack any deal.
“There are still serious issues on the table and a lot of technical work is needed. In all these negotiations, nothing is agreed until everything is agreed. The key point on the EU side is that we do not lower our standards in favour of US standards – that point is vital in terms of food safety and regulatory standards. We have been assured by EU negotiators that our standards will not be eroded. I want to be clear that this is a red line that we must not cross.
“Populists continuously produce scare tactics that our standards will be eroded but the EU is never going to sign up to a deal that would for example, change our rules in favour of US hormone treated beef. This will simply not happen.
“I do agree that there is a serious need for a real and open public debate on TTIP. This will be the biggest bilateral trade deal ever and it is clearly going to have a big impact on people’s lives. I firmly believe the potential benefits are huge for Ireland but it is of course right and proper that we engage with citizens and provide forums for real debate.”