Enda Kenny (Mayo, Fine Gael)

I am pleased to have this opportunity to brief the House ahead of the next meeting of the European Council in Brussels. As the House is aware, this was to have taken place next Monday. However, on Monday President Van Rompuy announced that he would convene the meeting of the European Council and that of the Heads of State or Government of the euro area a week later than originally planned. This is to allow time to finalise a comprehensive strategy for the euro area. In a number of key areas, the extra time will mean that we have a more complete picture available to us when we meet to take the necessary decisions.

The report of the troika mission to Greece will assist us in deciding what further elements may be necessary to address the situation there. This will have a read across to what may be necessary in terms of bank recapitalisations and how we should achieve them. ECOFIN will have time to have a further meeting, which has now been convened by the Polish Presidency, and the euro group will also meet.

When President Van Rompuy contacted me on Monday to alert me to the change, I told him that I did not have any difficulty with his suggestion if it was his assessment, as President, that further time was needed to get things right. In such a case, we should take that time and use it to best effect. I also said to him that it was important that all member states be involved in the discussions as we prepare for the European Council.

As the House will be aware, meetings of the European Council have, in recent times, been dominated by efforts to address the immediate challenges that we face. By necessity, our work has been driven by crisis resolution and the needs of the immediate situation. As a result, we are now better equipped than in the past to deal with problems when they arise. I am sure the House will agree, however, that it is essential that leaders take the time to take a longer term perspective to ensure that Europe has the right policies in place to generate growth and job creation and to deliver greater economic stability in the future.

Next week's meeting will be important in that regard. When we meet, we will discuss economic policy, including growth enhancing measures, economic governance and the external aspects of our economic policies. We will also prepare the Union position for the meeting of the G20, which will take place in Cannes in early November. Finally, we will finalise an EU position ahead of the Durban conference on climate change.

It is, of course, entirely appropriate that economic issues should be the focus of our meeting. The challenges facing Europe are being felt around the world, including in the US and emerging economies. While it is vitally important that member states, including Ireland, continue their efforts towards consolidation and structural reform, we must also intensify our efforts to secure sustainable and job creating growth. This requires determined joint action. I expect that our discussion will work towards identification of a number of priority areas for fast-tracked action. I hope that these will be as specific as possible and that we will identify those measures most likely to have a significant impact on growth and jobs. The Commission in particular has been giving careful study to this matter.

The Single Market, as Deputies are aware, is one of the Union's greatest strengths. As an exporting country, it is of immense value to Ireland. Despite decades of work, however, it remains incomplete. In April of this year, the Commission brought forward what it called a Single Market Act designed to fill in some of those gaps. In doing so, it identified twelve levers that it believed could have real impact on our current situation. These include measures that will have real resonance here, such as access to funding for small and medium-sized enterprises, SMEs, and creating the right regulatory environment to allow business to thrive. They also include measures that can help exporters looking to develop markets in other member states, including measures to boost consumer protection in a way that helps to build confidence in cross-border transactions, modernising the framework for public procurement, and plans for the digital single market, including the facilitation of e-commerce and cross-border use of online services, which are growing in importance on a daily basis. All efforts should now be made to drive this work forward with real purpose.

Energy and innovation are also areas with enormous potential to contribute to growth. In February of this year, the European Council offered suggestions on how work should be advanced. Although I do not expect a discussion of substance at next week's meeting, I do expect that we will agree to revisit our commitment to take stock of progress in December and March of next year, respectively. In this regard, a priority should be given to putting in place an EU-wide venture capital scheme.

This work must be accompanied by a genuine commitment by all member states to creating stable and sustainable economies across the Union. As the House is only too well aware, Ireland's economic choices are in large part determined by the strictures of our programme with the EU and IMF. However, through the Europe 2020 process and under stability and growth rules, non-programme member states have also submitted national reform programmes and have had these scrutinised under a process of peer review. These plans were collectively assessed by the European Council in June, when we endorsed country-specific recommendations proposed by the Commission.

There is an urgent need for action at European Union level, but we should not lose sight of the fact that much decision making in the area remains at national level. Our economies are highly interdependent and our fates hang closely together. To restore international confidence in Europe's economy, we need to ensure that commitments entered into at EU level are acted on swiftly and comprehensively by each member state. It is, therefore, vitally important that the recommendations made in June are now fully reflected in national decisions on budgetary policy and structural reforms.

There are other interesting possibilities on the table for the meeting of the European Council, including a temporary increase in co-financing rates for EU funds, accompanied by a prioritisation of projects focusing on growth, competitiveness and employment. It is also proposed that the European Investment Bank be asked to examine the possibilities for further contributing to boosting investment in Europe, including through optimal use of Structural Funds in countries facing particular difficulties, the leveraging of EU budget resources, and the facilitation of access to finance for small and medium enterprises. I welcome these proposals and hope there will be agreement to take them forward as a matter of urgency.

The European Council will also consider the external aspects of the Union's economic policy. Europe needs to ensure it is in a position to promote and defend its interests in the wider world. There are things we can do to contribute to our growth potential, both in the short and longer terms. As an exporting country, Ireland has a very strong interest in this debate.

While concluding the Doha round must remain a priority, a realistic assessment must conclude that agreement is not on the immediate horizon. Therefore, we need to attach renewed priority to bilateral and regional agreements, particularly with strategic partners and those whose markets are expanding at significant pace. This work should focus on lowering trade barriers, opening market access and ensuring the appropriate environment for investment and the protection of intellectual property. Public procurement is also an area of key importance.

As the House will be aware, after protracted discussions difficulties between the Council and the Parliament on the technical details of the six legislative measures to strengthen economic governance in the Union have recently been resolved, and the legislation is now being finalised. I welcome this. It will allow a much higher degree of surveillance and co-ordination, contributing towards sustainable public finances and greater economic stability throughout the Union.

In addition, we are moving towards completion of the first Europe 2020 cycle. We have adopted the euro plus pact, to which the European Council will return in December. Taken together, this is a significant and tangible policy response to the crisis Europe is facing. Unfortunately, it is too often dismissed or underestimated by those who may not appreciate the extent of what has been achieved, or the speed with which it has been put in place. Of course, there is always scope for more to be done.

We need to see the changes to the EFSF, introducing greater flexibility, take effect. As the House is aware, Ireland completed its process of adoption in good time prior to the end of last month. Ratification and entry into force of what has been agreed will put important new possibilities in place, including enabling the EFSF to intervene in secondary markets, to undertake precautionary lending, and to contribute to bank recapitalisation through loans to governments in non-programme countries.

In July, the Heads of State or Government of the euro area countries asked President Van Rompuy, in consultation with the Presidents of the Commission and the euro group, to come forward with specific proposals on how to improve working methods and enhance management in the euro area. Following bilateral consultation with all interested parties, I expect President Van Rompuy to report to the meeting of euro area heads following the meeting of the European Council.

Although President Van Rompuy has yet to make his proposals known, I expect they will focus on what can and should be done in the short term and what is for more medium to long term action. I also expect he will seek to balance the need for tighter co-ordination and discipline among countries in the euro area with greater commitment to mutual support. It will take fine judgment on his part to come up with balanced and acceptable proposals.

As the House will be aware, Chancellor Merkel and President Sarkozy, following their meeting at the weekend, have also stated they will come forward with proposals, some of which may require treaty change. Again, we do not yet know what they ha ve in mind and I await their suggestions with interest. However, I will make two observations. Any suggested treaty change, even if only intended to enhance the operation of the euro area, is a matter for the 27 EU member states, not just the 17 that are currently part of the euro area. We are all a part of the Union, and I would not like to see a situation evolve where there are two categories of membership. The second is that, as I have already made very clear, while I am open to giving any suggestions serious and detailed study, treaty change is not something that should be approached lightly.

We have taken a great many steps to ensure greater co-ordination in the euro area, some of which are only now beginning to take effect. We need to give them a chance to work, to take stock, and to see what further steps need to be taken. We need to explore what is already possible under the existing treaties, pushing right up to their limits if need be. The question we must ask ourselves is what measures need to be put in place. Only then should we consider how to do so.

There are a number of other items on the agenda for next week's meeting of the European Council which are worth mentioning here. The Council will discuss preparations for the G20 meeting in Cannes on 3 and 4 November, and will confirm policy positions for the Union. The Union wants to see the G20, which is meeting under its French Presidency, send a strong growth-oriented message aimed at restoring global economic confidence. We are looking to see an outcome that is concrete, with targeted specific actions, to respond to the serious challenge of the global economic downturn. Of course, in recent months Europe has been in the news in this regard. It is also an occasion to place the European response to the related problems of sovereign debt and difficulties in the banking sector in a global context. This alone marks out the meeting as an important occasion in the calendar ahead.

In addition to placing growth at the top of the agenda, the Union seeks continuing reform of the international monetary system; a strengthening of regulation of markets and financial services; measures to counter the excessive volatility of commodity prices; and to deliver global recovery and sustainable growth. The European Council will also prepare the Union's position ahead of the conference on climate change that will take place in Durban from 28 November to 9 December.

The House will also be interested to know that tomorrow morning, ahead of the meeting of the European Council, I will meet the President of the Commission, Mr. Barroso, in Brussels. I will convey to him our support in two vitally important areas. The first of these is that we need the community method, which is the traditional way of doing business in the Union, to remain our touchstone for the future. It gives the Commission a key role as the guarantor of the treaties and the initiator of policy proposals. This is not an academic point. It is a matter of real importance for a small member state like Ireland. We do not want to see a Union where the largest member states dominate the agenda by dint of their size or economic importance. That is not a balanced or durable arrangement. As I pointed out, when the Heads of Government meet we sit as equals and not as leaders of countries with larger or smaller populations. We need a Union where the equality of all member states is fully respected, in reality as well as on paper.

The second message will be my strong and determined support for the Commission's efforts to focus energies on jobs and growth. In this, the Commission's agenda is Ireland's agenda, and I will commit our personnel to working hand-in-hand with his.

I hope the EFSF issue will be sorted out in Slovakia later this week as reports indicate.

The issues I have outlined are important ones for us as we approach the important meetings that will take place in Brussels, and I look forward to briefing the House again and having a discussion after I return when the meeting concludes, as is now the norm.

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