Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

It was a stroke. Over the last five years, the greatest failure of Europe’s leaders has been to fall back into complacency after every period of turmoil. The agenda for tomorrow’s meeting of the Council might be the worst example of this so far. Since the Council last met, it has been confirmed that over 27 million Europeans are unemployed. Growth projections in key economies, the eurozone and the Union as a whole have been cut. Capital controls remain in place in member states to ensure they do not have to leave the common currency. The Union’s budget, which is already inadequate for what is required, has been delayed. The essential elements of a strong banking union continue to be undermined. Vital decisions have been fudged.

When the leaders of Europe fly to Brussels tomorrow, they will spend nearly all their time talking about tax collection and energy. I accept that both issues are serious. They are part of an overall economic package, but they are nowhere near the centre of the urgent and ambitious actions which are desperately needed. This is not the agenda of leaders who understand the growing demands of citizens. It shows a failure to understand that the sole focus on ways to deepen the Internal Market ignores the core problems facing Europe. Nothing that is to be discussed tomorrow will have an impact on growth or jobs in the near and immediate future. They may have an impact in the longer term. Nobody here or in Brussels has been willing to estimate their immediate impact. It is an agenda of leaders acting as if they have all the time in the world and no urgent business.

The Taoiseach has repeatedly told us about the laser-like focus on getting Europe through the crisis by delivering growth and jobs. This summit is indistinguishable from one which would have been produced without any national Presidency. There is nothing to be discussed which has not been working its way through the system for some time, ready to appear when space is available. A few weeks ago, the Tánaiste was busy jumping on the anti-hegemony bandwagon. He told us without any doubt that the Government’s policy is to push for a new economic policy at European level. If this policy is nowhere to be seen when we hold the Presidency of the Council, when will it appear? The agenda for this summit is exactly as it was intended when President Van Rompuy announced a work programme a year ago. When one steps away from the repetitive briefings about major breakthroughs, all one sees is the slow implementation of policy that has already been agreed.

It is a pity that much of our Presidency is being devoted to trying to push the European Parliament to sign off on a damaging budget agreement. At a time when Europe needs investment, the Union’s budget will implement a cut in investment, with the proportionately largest cuts hitting essential areas such as rural supports and research. Ireland should be supporting the position of the European Parliament in trying to lessen the damage done by the agreement, particularly in the immediate future. Equally, we should have used our position in the Presidency to propose a more fundamental review of the budget. This should have placed a new focus on ensuring the Union can play more than a minor role in helping the regions that are suffering most in the recession. Spending €144 a year to help each young unemployed person is not even a token attempt to directly alleviate these deep problems. The reality is that our Presidency is deepening the existing reliance on a single-track policy of integrated markets as the only answer.

It is agreed that the lack of a banking union was one of the major factors that caused the financial crisis. It also had a role in causing the wider economic crisis. Last year's political agreement to move forward with a banking union was an important part in stabilising the sovereign debt markets. Just as the agreement has helped, the failure to implement it in a sufficiently timely or comprehensive manner could cause considerable damage. I have spoken at length about the elements that are required for a durable banking union that supports growth rather than threatens it. As things stand, each of the pillar elements of a uniform resolution, deposit insurance and oversight regime has been watered down significantly. Last week, Mr. Schäuble again repeated his belief that a new treaty is required before these elements can be properly implemented. If this approach wins out, it could lead directly to a major escalation of the crisis the next time a bank is in difficulty or the market loses confidence in the ability of national governments to address emerging financial pressures. This is not an abstract issue. Europe cannot return to jobs and growth until it has a stable financial system which has the ability and confidence to lend. This cannot happen without the banking union. We need it now. The failure to seriously address the delay in implementing the banking union, or the watering down of the plans for such a union, represent a failure for this summit before it has begun.

The holding of these pre-Council debates was presented as a major reform and an increase in parliamentary accountability. The reality is that there is no accountability. All we get from the Taoiseach is a statement about how everything is moving smoothly and great things are being decided. No national position on the main items to be discussed is circulated. All the information we receive before these debates comes from Brussels. As I have said, the annotated draft agenda for tomorrow’s meeting is very limited. Everyone agrees that having a market which delivers sustainable, secure and affordable energy is important for Europe.

The Lisbon treaty extended the European Union’s competence in this area and it is necessary to move it forward. No information has been supplied on any specific matter to be discussed at the summit in regard to the energy sector. Therefore, we have to assume this is just a formal review rather than a substantive agenda item. The paperwork refers to reducing the cost of energy in the years after 2014 if the Internal Market reforms are implemented next year. This confirms that it has nothing to do with the immediate task of achieveing recovery through job creation and growth.

The summit will move forward the recent Commission proposal on fighting tax fraud and improper evasion. It requires significant detailed evaluation to ensure this is exactly what it will do. On the face of it, most of the proposed measures seem reasonable. They involve more systematic co-operation between tax authorities in the different member states and common standards in terms of transparency. These are the measures which deserve widespread support and they should both be uncontroversial and involve little or no administrative burden on businesses.

The principle that tax laws should be applied fairly, transparently and comprehensively is a good one and the bulk of the proposed actions will help us in the fight against the black economy. What this must not be allowed to be confused with is the much wider and more significant debate about tax competition. The obsessive pursuit of an agenda of tax harmonisation by some countries has completely distorted the economic agenda of the European Union, side-tracking it onto an issue which is completely marginal to the task of improving the short and long-term growth potential of the Union. What they have been seeking is uniformity on a scale not even found in the world’s oldest currency union, the United States of America. The various states have the ability to compete on taxes and subventions in a way that is impossible in Europe. Delaware is home to the nominal headquarters of the majority of major US firms. Other states are in a position to offer direct subsidies to companies to get them to move and they can go as far as involving zero tax and welfare contributions. Europe takes a middle approach which allows tax competition but does not allow it to involve subsidies or distort the ability of firms based in other countries to compete. No study has yet been produced anywhere which shows that enforcing tax harmonisation delivers a single job in Europe, but what it would do is directly undermine the economies of some peripheral economies. As long as the Commission limits its proposals to evasion and fraud, time can be freed up for more productive discussions on the issues which will actually have an impact on the European Union’s future.

The rising humanitarian crisis surrounding the Syrian conflict should be raised during the final session of the summit. The latest information is that aid agencies working with hundreds of thousands of Syrian refugees in Lebanon and Jordan are in need of urgent assistance. Rising summer temperatures and poor conditions mean they are facing more serious health risks than can be controlled and immediate action is needed. Ireland should support an urgent release of extra funding and, if required, personnel to prevent a further tragedy emerging. We should also support the efforts of the US Secretary of State, Mr. John Kerry, to inject greater urgency into the proposed peace conference. Unlike other such conferences, this one is not dealing with a conflict that has continued for many years but one which is in great danger of escalating even further. The reported decision of Russia to effectively provide open-ended military support for the regime could have a grave impact in reducing the willingness of the regime to embrace a negotiated settlement. Europe’s leaders should again reassert the fundamental principle that the Syrian people have the right to live in a democratic country free from repression.

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