1. Introduction



Download 82.99 Kb.
Date conversion18.06.2018
Size82.99 Kb.
Report of the Joint Committee on Finance, Public Expenditure and Reform visit to the Budget Committee and European Affairs Committee of the Bundestag

25-27 January 2012
1. Introduction.

A delegation from the Joint Committee on Finance, Public Expenditure and Reform visited the Budget Committee and the European Affairs Committee of the Bundestag. Sanction was granted for 5 members to attend; a further three members, who covered their own costs, also travelled. The delegation was led by Deputy Alex White (Chairman of the Joint Committee) and comprised Deputy Liam Twomey (vice-Chairman); Deputy Michael McGrath; Deputy Pearse Doherty and Deputy Richard Boyd-Barrett. Accompanying the delegation, paying their own costs, were Deputy Peter Mathews, Deputy Kieran O’Donnell and Senator Michael D’Arcy. Mr Ronan Lenihan, Clerk to the Joint Committee accompanied the delegation. The programme for the visit is at appendix 1



2. Briefing at Embassy


Ambassador Dan Mulhall welcomed the delegation and gave the members an overview on the perceptions of Ireland in Germany. The ambassador advised the delegation that the Mission in Berlin was one which explained Ireland to Germany and Germany to Irish policy makers. The Ambassador advised that brands such as ‘Kerrygold’ are very well known in Germany, but what was needed was to present Ireland in the ‘round’ and build on the positive feelings that exist for the country, particularly Irish culture and music. Germany is now the 4th most important market for Ireland. One of the prime areas within the Mission of achieving this goal was the use of cultural events.

The Ambassador briefed members on the various meetings that had been arranged and the political scene that exists at both the Federal level and within the Landers (there are 16 Landers which are partly sovereign constituent states of the Federal Republic of Germany). Following the September 2009 General Election, the Christian Democratic Union (CDU), its Bavarian sister party, the Christian Social Union (CSU), and the Free Democratic Party (FDP) formed a new centre-right government with Angela Merkel continuing as Chancellor. The 17th German Bundestag has 620 Members, eleven more than in the last electoral term. The largest parliamentary group is the CDU/CSU with 237 seats, of which 22 are so-called ‘overhang mandates’, ahead of the SPD with 146 seats, the FDP with 93 seats, the Left Party with 76 seats and Alliance 90/The Greens with 68 seats.1

In the move to the Euro the German citizens were assured that there would be no bail-outs. This has not proved to be the reality, so there was strong grassroots opposition particularly from within the government parties which causes political problems for Chancellor Merkel and the Government. The Chancellor and Government do not want to rely on opposition votes as such a scenario implies the inability of the Government to secure a majority from within its ranks.
3. Meeting with Berlin based Irish business community representatives.

Following the briefing by the Ambassador the delegation met with Berlin based Irish business community representatives. The discussion ranged over several themes and the following points were noted:



  • German exposure to personal debt is low as there is no encouragement to take out credit as there was in Ireland – it was illustrative to note that only 14% of Berliners own their own house and credit card ownership is rare.

  • For development (property and business) the route taken is to seek investors rather then finance through bank debt. In this regard the delegation was advised that proposals to banks for funding of developments are looked at very stringently. The level of funding advanced by a bank for a project is based only on what the rent yield will support.

  • The German bureaucratic system of permissions for property development is complex when compared to Ireland, but not insurmountable.

  • There is a need for a greater presence on the ground in regard to trade shows. Ireland has a green image in regard to food production and this is at the premium end of the market which gives higher returns.

A general point was raised in regard to the numbers of Irish who are working in Germany. It was noted, particularly in regard to construction trades, that during the boom Ireland gained a world class reputation and became world leaders in areas such as civil engineering and architecture and those who have these skills should be able to gain employment around the world but were not doing so due to a lack of language skills. It was suggested that in order to address this issue and not lose the world-leader status gained during the boom Government policy in regard to retraining should not be for re-skilling, but be concentrated on language training. Those with expert construction skills could find work if given language training and most of the business community present indicated in strong terms that the ability to employ more Irish on projects in German was down to language skills.
A list of the participants at the event is set out in appendix 2
4. Working Breakfast with the German-Irish Parliamentary Friendship Group

Established in 1987, the German-Irish Parliamentary Friendship Group is currently chaired by Dr. Lukrezia Jochimsen, who represents the Left Party (a former TV journalist, Ms Jochimsen was a correspondent in London for a number of years, during which time she did extensive reporting from Northern Ireland). The German-Irish Parliamentary Friendship Group has fifteen active members. The last visit of the group to Ireland took place in October 2008 at the invitation of the then Ceann Comhairle. The Chairman, Deputy White, thanked Dr. Jochimsen for meeting the delegation and commented that it was important for parliamentarians to have a joint interactive space and that an important element of the visit was to appraise German parliamentarians as to the how the economic and Euro crisis was affecting Irish citizens and that by such meetings we strengthen our bi-lateral relationships. In this regard the Chairman stated that while Ireland was fulfilling its obligations under the assistance package the full picture needed to be given. Deputy Boyd-Barrett noted that it was an imperative that it be understood by all that Ireland cannot spend what it does not have, however, the key to emerging from the economic crisis was investment which was now down some 70% and investment is a prerequisite for growth. Deputy O’Donnell raised the matter of Ireland’s corporate tax rate and how this compared to the effective corporate tax rate in other EU member States, particularly France. A general discussion ensued in regard to how the Fiscal Compact could shape a clear path for the recovery of the Euro on which point the Chairman, in his concluding remarks, noted that if the rules being proposed as part of the Compact were in place since the establishment of the Euro Ireland would not have been in breach as the economic crisis in Ireland was primarily down to the banks.

5. Meeting and Working Lunch with Budgetary Committee

Ms. Petra Merkel, SDP and Chair of the Budget Committee opened the meeting by remarking that the Committee had voted by a large majority in favour of providing support for Ireland in 2010. The Committee had taken note and been impressed by recent events in Ireland; including, most recently, the Troika report for the third quarter of 2011. The members of the Budget Committee were looking forward to hearing more about the situation in Ireland as well as views on the ESM and Fiscal Compact. A list of the participants is at appendix 3.


The Chairman, Deputy White, in responding, recognised the solidarity which had been shown towards Ireland in the recent period. He went on to speak about the current mood in Ireland, highlighting the extent of the cuts and the impact these had had on the Irish people. The Chairman noted that while it was true that Ireland was fulfilling its obligations under the assistance package, this did not give the full picture. The Chairman expressed support for fiscal discipline but noted that this alone was not sufficient. It is necessary to do more and indicated that it will be necessary to tackle the issue of Irish bank debt.
Following Deputy White’s introductory remarks, all of the members of the Irish delegation intervened individually. Deputy Doherty spoke about the importance of addressing Irish bank debt, noting that the situation in Ireland and in the global economy has changed significantly since the agreement was signed with the troika and that the bank debt which had been socialised was a direct result of European policies. He expressed concern regarding the fiscal compact and raised the matter that people in Ireland had been very upset about the leak of Irish budget information.

Deputy O’Donnell also raised the issue of Irish bank debt and advised that the fiscal side of the economy had stabilised, but that bank debt was like a second large mortgage hanging over Ireland. He hoped that the budget Committee might be able to support Ireland in seeking to restructure part of our debt.

Deputy McGrath noted that Europe needs a success story and that Ireland represents the best prospect of providing that success story. The Deputy emphasised that Ireland is meeting all its obligations but hoped that the Budget Committee might be able to support Ireland in dealing with the Anglo-Irish Bank Promissory Notes. While expressing respect for German parliamentary procedures, the Deputy expressed concern regarding the budget leak.
Deputy Boyd Barrett emphasised that the low paid and unemployed in Ireland were suffering enormously. The Deputy advised that Ireland had been a poster boy for the economic boom and was cheered on by all. The Deputy noted that everybody accepts that you can not spend more than you generate but in order to generate you must invest and that in Ireland investment had now has fallen by 70% from that at the peak. Without investment Ireland will fall into a debt/austerity downward spiral which would eventually lead to default. The Deputy expressed his opposition to the fiscal compact, adding that if put to referendum in Ireland there is a good chance that it will fail as there are already many in Ireland calling for default and this sentiment will rise unless there is debt relief and that if Ireland defaulted, every European would suffer.
Deputy Matthews opened by stating that Ireland was not a success story but a story of stamina and survival. The Deputy spoke about the level of Irish bank debt and also highlighted the high level of Irish private debt and called for a write down of Irish debt. The Deputy advised the Budget Committee members that if private and business debts were included in the calculations the situation in Ireland could be seen as worse than in Greece.

Deputy Twomey noted to the Budget Committee members present that the delegation represented diverse views. The Deputy also drew attention to the leak of budget information and commented that some good may come of it as it may lead to more open debate on budgets in Ireland. The Deputy stressed that he did not wish the members of the Budget Committee to take a negative sentiment away from the meeting; Ireland had every intention of repaying its debt and there is good sentiment on the financial markets at the action taken and being taken by Ireland and this will not be thrown away and in this regard he drew the attention to Wednesday’s bond sale by the NTMA.

Opening discussion at the working lunch, The Chairman, Deputy White, took the opportunity to outline the Government’s position. The Chairman stated that the Government had a huge majority in parliament and that it had no intention of defaulting on its debt or its responsibilities. He also noted that the Government is currently negotiating with the Troika on how to deal with a block of Irish debt in relation to the Anglo Irish Bank promissory notes. He concluded by stating that he wanted to make it very clear that it is not a majority viewpoint that Ireland is in a worse position than Greece.
The German delegation responded individually to the points which had been made by the Irish side. Chairperson Merkel acknowledged the concerns that had been raised about the leak of budget information. She stated, however, that the information had been given limited circulation within their Committee and they believed that the leak had actually come from the European Affairs Committee.
Norbert Barthe, (CDU) noted, from the perspective of the German Budget Committee, that Ireland’s programme was running well and he had been interested to hear that some of the Irish members judged this differently. He reiterated, however, that from the perspective of the Budget Committee it was working well. He continued by noting that Germany wants to keep Europe together and any impression that they were not interested in solidarity was wrong. Solidity and solidarity were two sides of the same coin. Throwing more and more money at the effects of the crisis won’t help. It is also necessary to deal with the root causes. He noted that Germany is also trying to achieve a balanced budget and concluded by making clear that he would not compare Ireland and Greece. Greece is different, it is a special case.

Also speaking for the CDU, Klaus–Peter Willisch stated that while he was glad to see everybody working together, he was opposed to risky rescue package policies. The current situation means that the German parliament is left debating social affairs in Greece or corporation tax in Ireland. When the Euro was introduced, the German Government had promised no bail outs. Germany already experiences this problem internally as some of its states are in a poor financial situation. If German creditworthiness continues to be strained it will in the end be weakened so much that it will be useless. He added that Ireland was clearly fundamentally different to Portugal or Greece, its problem was its banks. If Ireland could be compared with anybody, it is Iceland - huge agriculture and huge banks. Concluding, he noted also that there was a feeling that Ireland’s corporation tax rate had taken investment away from Germany. This was a domestic issue. Voters asked German politicians, why they had to work until age 67 and pay high taxes, just so that those taxes could be used to help Ireland whose own low tax policies had taken investment away from Germany.

Lothar Binding (SPD) spoke about the wide spread recognition and admiration for what is being done in Ireland. He also argued, however, that attempts to find a solution in Europe are not tackling the root causes of the crisis. His colleague Bettina Hagedorn (SPD) voiced concerns that the European project is losing acceptance among European citizens. Far right parties are becoming stronger in some countries. She noted that it was important to look at how Irish people react to what is happening at political level. Concluding, she noted that the fiscal compact alone would not be sufficient. People need a light at the end of the tunnel. This is a missed opportunity to put binding economic cooperation in place.
The Green Party representative, Tobias Lindner, noted that when voters complain about bailing out Greece, he always points to Ireland as a positive example. It is necessary to tackle long term issues but it is also necessary to deal with short term resource needs. Competitiveness must also be improved. Germany is proud to export a lot and they don’t want to change this. At the same time, it is clear that as long as Germany has a surplus, somebody has a deficit.
Summing up Chairperson Merkel detailed the reform process which had been implemented in Germany over the last twenty years. She added that it was dangerous to just keep cutting but added that Keynesian principles had to apply in good times as well as in bad. In good times, it is necessary to put money aside. She also noted that Germany had found the debt brake to be a very useful tool.

Responding the Chairman Deputy White expressed appreciation of the reform process in Germany. He noted, however, that while some labour market reforms had been introduced under the Irish assistance programme, these were not particularly extensive. This reflects the fact that they are not needed in the Irish economy which already has a flexible labour market. Referring back to the comments by the CDU representatives, he noted that the Irish Government had also made a pact with the Irish people when the Euro was introduced and that pact did not involve being drawn into a vortex of debt. He quoted the German philosopher Habermas speaking about “competing resentments in Europe” - Irish resentment of having to pay for the banks; German resentment about bailing out others. It is necessary to break through these resentments and engage with one another. He went on to speak about the fiscal compact, noting that the case for fiscal discipline was well made and accepted. He added, however, that he could speak for everybody in the delegation in stating that fiscal discipline is necessary but not sufficient. He also noted that even if a debt brake had been in place, it would not have helped the situation in Ireland. On the question of a referendum, he emphasised that the Government’s position is that if it is legally necessary a referendum will be held, if it is not, it won’t.

In some brief remarks, Deputy Doherty expressed Sinn Féin’s opposition to the fiscal compact and noted that they would challenge a decision by the Government not to hold a referendum in the Supreme Court. He also raised the link which Germany has introduced between the ESM and the Fiscal Compact, describing it as not legally enforceable and a form of bullying. Deputy Boyd-Barrett noted that Ireland could not develop in a rational way while seeking to pay off the gambling debts of the financial sector. Some Irish people already think that we should default and some think that we will do so anyway. It will be a problem for Germany if Ireland defaults.
Deputy McGrath responded to a question on the Financial Transaction Tax, stating that he supported it in principle but it should be introduced at a global level. If introduced at the level of the Euro zone 17 without the United Kingdom and the financial sector in London then it would be very problematic for Ireland. Deputy O’Donnell spoke about the importance of the corporation tax rate for Ireland, noting that it brought investment to Europe and this was of benefit to all.
Concluding the working lunch, Deputy White thanked Ms. Merkel and the members of the Budget Committee for their time and invited a delegation to visit Ireland as guests of the Finance Committee. Ms. Merkel responded positively, thanking the delegation for their visit and expressing an interest in visiting Ireland in the future.
6. Meeting with the European Affairs Committee

Mr Gunther Krichbaum CDU (Chair) opened with some words of welcome; the Chairman Deputy White opened by introducing the Irish delegation and spoke about the importance of contact between national parliaments. A list of the participants is at appendix 4.

Several of the Irish members then made short introductory comments, which followed the same lines as those made earlier in the day in the meeting with the Budget Committee. The need to deal with Irish banking debt, the importance of the corporation tax rate, the need for a success story in Europe and the difficulties being experienced by ordinary Irish people, including emigration and unemployment, were all highlighted. Deputy Doherty criticised the role of the ECB and the Irish Central Bank and Deputy Boyd-Barrett criticised the fiscal compact, arguing that if there is a referendum in Ireland, there is a good chance that it will be lost.

Responding Mr. Krichbaum spoke about the need to regain the trust of the markets, it is necessary to become more competitive and ensure diversified economics. Ms Gabriele Molitor FDP (Liberals) argued that we are living in a globalised world and it is important to understand the need to reform. This is essential. For his part, Mr. Alois Karl (CDU) spoke about the fact that there had been excesses in Ireland and that the roots of the disaster lay in Ireland and not in Europe. He noted that as a politician, he was repeatedly asked by Germans why they had to pay for Ireland or for Greece. At the same he also emphasised that Ireland is a good partner in Europe and a good partner for Germany.
Deputy Twomey in reply stressed that Ireland was not coming to Europe with a begging bowl. There were different views in the delegation but Ireland is an open and competitive economy which could react quickly. Deputy Matthews intervened to make many of the same points he raised during the meeting with the budgetary committee, stressing in particular that in his view the current crisis is a crisis of the global financial system. He also criticised the role and exposure of German banks and drew attention to the contribution the London Debt Agreement of 19532 made to the German recovery.

Responding Mr. Krichbaum spoke about the need to rebuild trust both of the markets and of the people. He referred to the strong support in the Bundestag for more regulation and the financial transactions tax. Ten years ago, Germany was criticised for its large industrial sector and small financial sector. Deutsche Bank is the only German “big player” in the global financial system. Every industrial nation needs at least one player in the financial system. He went on to criticise the UK, arguing that they will have great difficulty in the coming years. It is necessary to have a diversified economy. He also criticised the ratings agencies and highlighted the need for a European ratings agency. Finally, he asked about the possibility of a referendum on Ireland.

Deputy White, in response, noted that the Government’s position is that if a referendum is legally necessary it will be held, if it is not it will not. This may become clearer in the next week or two. He also emphasised that the delegation wanted to deliver a positive message to their German counterparts. Ireland is looking to the future with hope and expectation. He also noted that work is ongoing on the Anglo-Irish Bank promissory notes and support for this would be appreciated.
Deputy Doherty intervened to express his party’s opposition to the Fiscal Compact and noted that they would take a challenge in the Supreme Court if a referendum is not held. He expressed particular concern about the linking of the ESM and Fiscal Compact describing it as a form of bullying and querying its legality. Deputy Boyd Barrett stated that there was clear agreement that you could not live beyond your means. In order to grow and diversify its economy, however, Ireland could not be burdened by banking debt. He also expressed his support for a financial transactions tax and raising the corporation tax rate.
In a closing comment Deputy O’Donnell noted that the Irish economy was already much more diversified since the collapse of the property bubble. He went on to highlight the importance of the corporate tax regime for Ireland, noting that the effective tax rate in France is in fact lower than in Ireland, and expressed his hope that the delegation had increased the German side’s understanding of the situation in Ireland.

Concluding, Mr. Krichbaum thanked the delegation for the useful discussions. He reverted to the issue of the corporation tax rate querying the figure for France. He said that the impression in Germany was that the low corporation tax rate had lured a certain type of company to Ireland and that he was pleased that this was now changing. On the fiscal compact, Mr. Krichbaum reiterated again the need to win back trust and send a signal of stability. On the question of a referendum, Mr. Krichbaum said that it was clear that this was a question that each country had to decide for themselves. Mr. Krichbaum noted that if the fiscal compact failed it would really send a signal that Europe was unable to solve its problems. In a last remark, Mr. Krichbaum noted that if, when the European project began and a referendum on German membership had been held in countries like the Netherlands and Belgium which suffered so much under the Nazi regime, it would not have been passed. Deputy White concluded the meeting by thanking Mr. Krichbaum and the German delegation and looking forward to future dialogue.

7. Meeting with the Organisation of German Taxpayers

The German Taxpayers Federation is an association established in 1949. It is a nationally organised NGO and lobby group. Its main aims are the reduction of taxation and public spending, as well as the reduction of bureaucracy and public debt and it purports to represent the views of German tax payers. The organisation’s outlook is very conservative and it strongly favours Government spending cuts. It is wary of the financial guarantees that Germany has given under the EFSF on account of their potential future burden on the taxpayer. Mr Stuchel, the deputy head of the organisation and Mr Warneke, head of the budgetary section made a presentation to the delegation.


At the entrance to the German Taxpayers Federation building is a display of the Public Debt in Germany – this now exceeds €2 trillion Euro - the display is the so called “tax clock” which calculates the increase in German debt by the second and this shows that public debt in Germany increases by some €1,300 per second. The public debt per capita in Germany is now in excess of €24,500. The delegation was advised that the Public Debt Clock was a powerful tool as both citizens and media organisations were able to focus public opinion on the cost to Germany of the bail-out of the Euro and in this regard, for German taxpayers, the Irish bailout is even less popular with those funding it than it is here in Ireland.

The delegation was advised that the German Taxpayers Federation produce an annual book on public waste, it is called the ‘Black Book’ and is now in its 39th Issue. The ‘Black Book’ details incidence of waste of federal taxpayers’ money with examples from different areas in which the public sector lacked an economic and efficient use of taxpayers' money. The book documents numerous examples of federal, state and local government, where the waste of taxpayers' money in various forms and with different amounts of money is discovered. The delegation was given an example - the construction of bridge over a duck pond at a cost €1 million. The pond during construction had a pathway built around it. However, it was also decided to build a bridge over the pond and this was considered to be a waste of taxpayers’ money given that the circumference of the pond was less the 150 metres. The ‘Black Book’ highlights bad planning, cost overruns and deficits in procurement.

8. Heinrich Böll and Ireland Evening: Film screening, short lecture & reception

The Embassy of Ireland hosted the launch of a new book “Heinrich Böll and Ireland” by Dr. Gisela Holfter a Senior Lecturer in German and Joint Director of the Centre for Irish-German Studies at the University of Limerick. The launch included a screening of “Irland und siene Kinder” followed by a presentation by Dr. Holfter and an open discussion; René Böll a son of Heinrich was also in attendance. Members of the delegation took the opportunity to attend and to meet with the German and Irish audience.

9. Briefing and exchange of views with the German Institute for Economic Research (DIW)

Founded in 1825, the German Institute for Economic Research (Deutsche Institut für Wirtschaftsforschung – DIW Berlin) is the largest economic research institute in Germany. Its core mandates are applied economic research and economic policy consulting as well as the provision of research.

The delegation were advised that work of the Institute is divided, thematically, into nine Research Departments: Macroeconomics; Forecasting and Economic Policy; Development and Security; Energy, Transportation, Environment; Climate Policy; Innovation, Manufacturing, Service; Competition and Consumers; Public Economics and Education Policy. The Institute is predominantly publicly funded and 120 of its 180 staff are research economists. The institute’s core responsibilities are applied economic research and economic policy consulting. Dr. Ferdinand Fichtner, Head of Forecasting and Economic Policy was joined by senior DIW economists Kerstin Bernoth and Simon Junker as well as Professor Sebastian Dullien.

The focus of discussions was on Ireland and the Euro zone and the presentation given is attached at Appendix 5.

Deputy Mathews raised the matter of re-hypothecation. In the view of DIW the problem is not with the secondary markets rather with the interbank system as the linkages are between Governments and the Interbank system where, in the view of DIW, the Government are doing their job. However, DIW was unsure of this being the case in the banks as they consider the banks do not have enough capital reserves and with the current crisis Government bonds are not a secure as they were. In this regard, DIW considers that the Interbank system is not working as Governments wanted the banks to reduce the level of national sovereign bonds held whereas the opposite has occurred. In regard to a question by the Chairman on whether the Fiscal Compact is sufficient, the DIW view was that this is not tackling the current crisis or the cause of the crisis. In the view of DIW it is not the capital flows that causes problems, it is what the capital is used for; asset bubbles. In response to a question by Deputy Doherty, DIW considered that Eurobonds could be a solution to the crisis but they are considered to be too cumbersome, as to have Eurobonds requires that Europe becomes both more democratic and federal and in reality they cannot work without ever greater fiscal union. Deputy O’Donnell enquired as to what stage did, or would, DIW consider that the debt would become unsustainable and what would be a solution at that stage. DIW considered that if a Federalist or Transfer Union was not achievable then a Marshall Plan type solution would be needed.

10. Meeting with Professor. Helmut Anheier, Dean of the Hertie School of Governance & Professor Mark Hallerberg.

The Hertie Foundation carries on the life’s work of Georg Karg, owner of the Hertie department stores. Founded in 1974, it is one of today’s largest foundations in Germany, with assets to the order of over € 800 million. In 1998, the Foundation sold its shares in the company, and has been independent since.

In 2003 the Hertie Foundation founded the Hertie School of Governance to institutionalise research and teaching on new forms of statehood and societal governance. The mission of the Hertie School of Governance is to prepare students for leadership positions in government, business, and civil society institutions, to produce knowledge for good governance and policy-making, and to encourage responsible stewardship of the common good.

Professor Anheier welcomed the delegation and due to an unexpected issue advised he could not remain for the full discussion. Professor Hallerberg, given the time constraints, suggested that the delegation should agree one specific topic for discussion. However, before commencing he did wish to pose a pertinent question – had the Parliament every debated what the EU Commission had said in their report post each quarterly visit by the Troika? The delegation did agree to solicit the views of Professor Hallerberg in regard to the issue of Debt Break3.
Professor Hallerberg, who was American and not German, considered that, from his experience, Germans are very legalistic and hold the German Basic Law or the de facto German Constitution in very high regard. Professor Hallerberg noted that in 1990 Germany was reunified and post reunification some of the Landers, or States had to be bailed out, however, some Landers did not adhere to the terms of the bail-out. Therefore, German citizens have direct, recent experience of a bail out process, albeit an internal Federal State to Landers bail-out, whereby some of those Landers being bailed out did not act in accordance with the conditions of the bail-out. A point of importance in regard to this experience of bailing out the Landers was that this was down to Germans themselves, it was self-inflicted.

This, Professor Hallerberg suggested, was a key experience and of greater importance to understanding the national ‘psyche’ or attitude to debt breaks (bails-outs, debt forgiveness or debt write down) – if the Landers, that formed part of the German Federal State, did not adhere to conditions laid down in a bail-out then what would occur if Member States of the Euro zone or European Union did the same in regard to any bail-out that would be funded in whole or part by Germany? Professor Hallerberg considered that this particular experience allied to how, on the establishment of the Euro, Germans were told by the political elites that bails-outs would not happen is key to understanding the German attitude to issue of debt.

In regard to a question on the Fiscal Compact, Professor Hallerberg noted that the issue of ‘cementing’ into a Member State’s constitution of a debt break rule was not all it might at first purport to be in regard to Germany. In this regard Professor Hallerberg advised the delegation that two matters should be considered; firstly, the debt break rules would only enter into force of a phased basis in Germany and secondly, under the German Basic Law - on a majority vote in the Bundestag - the Federal Government can set aside the Basic Law and thereby circumvent any fiscal rule or debt break provision. Professor Hallerberg advised that this last occurred, the suspension of the provision of the Basic Law, in the early 1990s so as facilitate Germany reunification.
11. Wrap up meeting

Following the conclusion of the meeting with Professor Hallerberg members had a wrap up discussion with the Ambassador. It was considered that the visit was important in that as Parliamentarians the delegation were now informed as to both the thinking of German citizens and that of German Parliamentarians. Communicating an understanding of the difficulties faced by Ireland could only progress the case for change at a pace which was acceptable to the general body of citizens.


_______________________________

Alex White T.D.

Chairman of the Joint Committee

April 2012.

Appendix 1


Programme for the visit of the Joint Committee on Finance, Public Expenditure and Reform, Berlin, 25-27 January 2012

Wednesday, 25 January

12.05 Depart Dublin on EI 334

15.15 Arrive Berlin Schönefeld Airport

16.30 Arrive Hotel following train transfer: Motel One, Spittelmarkt


17.15 Briefing at Embassy

Embassy of Ireland, Jägerstrasse 51, 10117 Berlin
18.00 Meeting with Berlin based Irish business community representatives

Embassy of Ireland, Jägerstrasse 51, 10117 Berlin
Thursday, 26 January

08.30 Working breakfast with members of the German-Irish Parliamentary Friendship Group of the Bundestag



Bundestag, Platz der Republik 1, 11011 Berlin
11.00 Meeting with Petra Merkel MdB, Chair of the Budgetary Committee of the Bundestag and selected Committee Members
12.30 Working lunch with Budgetary Committee

Bundestag, Platz der Republik 1, 11011 Berlin
(Consecutive interpretation will be provided at meeting and lunch by the Bundestag)
15.30 Meeting with Chair, Gunther Krichbaum MdB, Chair of the European Affairs Committee of the Bundestag and selected Committee Members

Bundestag, Platz der Republik 1, 11011 Berlin
17.00 Meeting with the Organisation of German Taxpayers (NGO)
19.00 Attendance at Heinrich Böll and Ireland Evening

Film screening, short lecture & reception

Opportunity to meet with German and Irish audience

(Event is part of the Embassy’s public diplomacy programme and open to the public)


Embassy of Ireland, Jägerstrasse 51, 10117 Berlin

Friday, 27 January

08.30 Briefing and exchange of views with the

German Institute for Economic Research (DIW)

Mohrenstraße 58, 10117 Berlin
10.00 Meeting with Prof. Helmut Anheier, Dean of the Hertie School of Governance & academic colleagues

Hertie School of Governance, Friedrichstrasse 180, 10117 Berlin
11.00 Wrap up meeting at Embassy

Embassy of Ireland, Jägerstrasse 51, 10117 Berlin

12.15 Depart for Schönefeld Airport (train transfer)


15.15 Depart for Dublin on EI 335
17.20 Arrive Dublin

Appendix 2

Participants in Business Event with Oireachtas Joint Committee

25 January 2012

Ciara Breslin UFA Cinema (animator)

Fergus Burke RB Architects

Sean Clarke Arup

Jody Gannon The Big B Animation

Barney Mathews Cooley Group

Henry Norton Norton ICRN

Eddie McGreal Imilia Interactive Mobile Solutions

Brian O’Connor Rethink (Chair of Irish Business Network Berlin)

Adrian O’Sullivan European Property Inv

Nicole Srock Stanley Dan Pearlman

Billy Telford Next Estate


Appendix 3

Meeting and Working Lunch with Budgetary Committee - Bundestag 26 January 2012

Irish Participants:

Deputy Alex White, Labour (Chair)

Deputy Liam Twomey, Fine Gael (Deputy Chair)

Deputy Michael McGrath, Fianna Fáil

Deputy Pearse Doherty, Sinn Féin

Deputy Richard Boyd Barrett, United Left Alliance

Deputy Kieran O’Donnell, Fine Gael

Deputy Peter Matthews, Fine Gael

Senator Michael D’Arcy, Fine Gael

Ambassador Dan Mulhall

Maeve von Heynitz

Ronan Lenihan, Clerk


German Participants:

Petra Merkel, SPD (Chair)

Norbert Barthe, CDU

Bernhard Schulte-Drüggelte CDU

Klaus –Peter Willsch, CDU

Bettina Hagedorn, SPD

Klaus Hagemann, SPD

Lothar Binding, SPD

Tobias Linder, Green Party

Dr. Beate Hasenjäger, Head Clerk

Mr. Carsten Bösche, Clerk
Appendix 4

Meeting with the European Affairs Committee
Irish Delegation:

Deputy Alex White, Labour (Chair)

Deputy Liam Twomey, Fine Gael (Deputy Chair)

Deputy Michael McGrath, Fianna Fáil

Deputy Pearse Doherty, Sinn Féin

Deputy Richard Boyd Barrett, United Left Alliance

Deputy Kieran O’Donnell, Fine Gael

Deputy Peter Matthews, Fine Gael

Ambassador Dan Mulhall

Maeve von Heynitz

Ronan Lenihan, Clerk
German Participants:

Mr Gunther Krichbaum CDU (Chair)

Mr Alois Karl CDU

Mr Andrej Hunko Left Party

Ms Gabriele Molitor FDP (Liberals)

Appendix 5



Presentation: Macroeconomic Developments in Germany and the World Economy – DIW Berlin, 27 January 2012.

1 http://www.bundestag.de/htdocs_e/bundestag/members17/index.html


2 ECONOMIC GROWTH CENTER YALE UNIVERSITY - CENTER DISCUSSION PAPER NO. 880: FINANCIAL VERGANGENHEITSBEWÄLTIGUNG: THE 1953 LONDON DEBT AGREEMENT Timothy W. Guinnane Yale University January 2004 (seen at http://www.econ.yale.edu/growth_pdf/cdp880.pdf). The 1953 London Debt Agreement settled Germany’s debts from the period between the two world wars, and allowed the country to re-establish its role in international capital markets. The Agreement wrote-down the overall debt by about 50 percent and gave the debtors a much longer period to repay. One interesting clause in the Agreement allowed Germany to postpone some payments until such time as re-unification. The Agreement reflects a subtle and responsible understanding of the problems associated with the reparations and debt crises of the 1920s and 1930s, as well as fears about the moral hazard problems that would arise with making any part of the Agreement contingent on events Germany could influence.


3 The 2011 fiscal year is the first occasion Germany’s new budget rule is being put into practice. Known as the ‘debt brake’, the new arrangement replaces the ‘golden rule’ applicable until 2010 and contained in the relevant section of Germany’s constitution, namely the old version of Article 115 of the Basic Law







The database is protected by copyright ©hestories.info 2017
send message

    Main page