Enda Kenny (Mayo, Fine Gael) | Oireachtas source

I am pleased to be able to update the House on the meeting of the spring European Council which took place in Brussels on Thursday and Friday, 20 and 21 March. While the meeting focused on developments in Ukraine, it also had a wider agenda with an economic focus, including the European semester, the Europe 2020 strategy, industrial competitiveness, climate change and energy, banking union, taxation and external relations. In addition to developments in Ukraine, the Council discussed three other external relations items, namely, preparations for the EU-Africa summit, recent progress in negotiations toward the reunification of Cyprus and an international investigation into alleged war crimes in Sri Lanka. The Minister of State, Deputy Paschal Donohoe, will go over these issues in his statement, as well as reporting on the industrial competitiveness discussions which are part of the ongoing efforts of EU leaders to promote economic growth and job creation.

Last week's annexation of Crimea by the Russian Federation constitutes a dangerous precedent with no place in the Europe of the 21st century. The European Council last week reiterated the European Union's support for Ukraine's sovereignty and territorial integrity, while strongly condemning the annexation of Crimea and Sevastopol. The European Union will not recognise the referendum of 16 March in Crimea which was in clear violation of the Ukrainian constitution. Last week's summit asked the European Commission to evaluate the legal consequences of the annexation of Crimea and to propose economic, trade and financial restrictions for rapid implementation.

As Ireland and its partners have made absolutely clear, Russia's actions are in breach of its international and bilateral obligations, including the Helsinki accord which in the past 40 years has contributed to overcoming divisions in Europe and building a peaceful continent. Frankly, Russia is only isolating itself by its actions and I urge it to reconsider its approach as a matter of urgency. Any further destabilisation could have serious consequences for European stability and security. Europe and the world need stability based on the fundamental principles of sovereignty and territorial integrity. Russia's behaviour is endangering this stability and represents a direct threat not just to Ukraine but also to all of its neighbours, as well as the wider international community.

Against the backdrop of these deeply disturbing developments and in the absence of steps towards de-escalation by Russia, last week's European Council took the following additional, concrete measures. It extended the visa ban and asset freeze to an additional 12 individuals, cancelled the next EU-Russia summit and agreed not to hold regular bilateral summits, agreed to support suspension of Russia's accession negotiations to the OECD, Organisation for Economic Co-operation and Development, and the IEA, International Energy Agency, urged timely agreement on an OSCE, Organisation for Security and Co-operation in Europe, mission in Ukraine, and agreed, if no agreement on a credible OSCE mission is reached in the coming days, to draw up an EU mission. This matter has been dealt with since the Council meeting. The Council also made it clear that further steps by Russia to destabilise the situation in Ukraine would lead to additional and far-reaching consequences for relations in a broad range of economic areas and we called on the Commission and member states to prepare possible targeted sanctions. It was decided to advance the signature of the association agreements with Georgia and Moldova to June this year

These additional measures follow on from the steps which we took at our meeting on 6 March, namely, suspension of work with the Russian Federation on visa matters and the new agreement on an enhanced EU-Russia partnership and co-operation agreement. This came in addition to the suspension of preparatory work for the G8 summit. The Foreign Affairs Council subsequently introduced travel restrictions and an asset freeze against those responsible for undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.

The nature and scope of sanctions is always a complex and difficult issue. As I said in Brussels last week, inevitably, they will have negative economic consequences for the European Union, including Ireland, as well as for Russia. It is only right, therefore, that we prepare such decisions carefully and we have tasked the Commission accordingly. As a small country which has traditionally relied on respect for the rule of law as the fundamental guarantor of stability in the international system, Ireland should take a firm position on what has happened in Ukraine. It would be wrong, however, to suggest this is only an Irish view. The conclusions of last week's European Council made it explicit that "there is no place for the use of force and coercion to change borders in Europe in the 21st century". As a country which had the honour to serve as the chair in office of the OSCE as recently as 2012, I do not see how Ireland could fail to take a strong view on such matters.

The High Representative of the Union for Foreign Affairs and Security Policy for the European Union, Catherine Ashton, has been tasked by us to draw up plans for an EU contribution to facilitate the work of the OSCE special monitoring mission to Ukraine, the terms of which were agreed to by the OSCE last Friday. Ireland is, of course, open to participation in the OSCE mission.

In parallel with the additional measures against the Russian Federation, the European Council emphasised EU support for Ukraine, including through macro-financial assistance. I also strongly support the economic assistance package of €11 billion announced by the European Commission President, José Manuel Barroso, on 6 March. This is a further demonstration of our support for and solidarity with the authorities in Kiev which continue to show commendable restraint in the face of huge provocation. Together with the other leaders and in the presence of Ukraine's Prime Minister, Arseniy Yatsenyuk, I signed the political provisions of the association agreement with Ukraine on the second day of the European Council. The European Union is committed to signing the remainder of the association agreement on a deep and comprehensive free trade area. In the meantime, the Union will soon temporarily remove customs duties on Ukrainian exports to the European market. These steps are proof of the European Union and Ukraine's shared wish for closer political association and economic integration.

We welcomed the Ukrainian Government's commitment to ensure its structures were inclusive and reflected regional diversity, as well as ensuring full protection of the rights of persons belonging to national minorities. We also welcomed the commitment to undertake constitutional reform, to investigate all human rights violations and acts of violence and to fight extremism. The European Council further encouraged Ukraine to ensure its presidential election on 25 May would be free and fair.

Last week's summit also reconfirmed the European Union's wish to further strengthen its political association and economic integration with Georgia and Moldova. We indicated that we aimed to sign the association agreements with these countries no later than June.

Overall, we have sent a clear message to Russia that our words are backed up with firm intent, even though the measures will entail consequences for all of us. However, while there is a need to demonstrate our resolve to Russia and the signs are not at all positive, we need to keep channels of communication open. Dialogue remains important, particularly when differences are most acute. Ireland and its EU partners will also make their views known at the United Nations. This is not a dispute between the European Union and Russia. What is happening in Ukraine is a direct challenge to the rule of law and has implications for the whole global community.

The economic agenda touched on the European semester and the review of the Europe 2020 strategy. Last week's meeting concluded the first phase of the European semester for 2014 by finalising guidance on this year's national reform plans. We placed particular emphasis on policies enhancing competitiveness, supporting job creation and fighting unemployment. Ireland will be a full participant in this year's European semester process following successful completion of its EU-IMF programme. The Minister of State, Deputy Paschal Donohoe, will update the Oireachtas Joint Committee on European Affairs on our preparations on Tuesday, 1 April.

We also took stock last week of progress in implementing the Europe 2020 strategy. Exchanges were informed by the European Commission's recent communication which showed quite clearly that overall performance was mixed and that the crisis had slowed down progress towards key goals. The modest European economic recovery must be supported by strong re-engagement with Europe's post-crisis strategy for smart, sustainable and inclusive growth. I welcome the European Council's call on member states to step up efforts to reach the 2020 targets. The Commission plans to launch a full public consultation in April. I hope we will see strong stakeholder engagement with this consultation, including from national parliaments.

Last week's meeting also considered progress in completing banking union. I was pleased that the European Council welcomed the agreement reached with European Parliament negotiators on the next pillar of banking union, namely, the single resolution mechanism, SRM. The SRM is an important contributory factor to breaking the link between sovereign and banking debt. The new mechanism will allow decisions to be made in an objective and independent fashion. These decisions will be taken in line with the principles of resolution set out in the bank recovery and resolution proposal. This means that shareholders and creditors should bear the costs of resolution before any external funding is guaranteed, while private sector solutions should be found instead of using taxpayers' money.

Aspects of the SRM relating to financing are covered by an intergovernmental agreement. Significantly, the agreement with the European Parliament reduces the period of mutualisation from ten to eight years. The pace of mutualisation has also been accelerated to allow for 40% mutualisation in year one, followed by an additional 20% in year two, an important development for the overall credibility of the project. It signals that we are serious about breaking the link between the sovereign and the banking sector. The agreement also provides that steps will be taken to develop appropriate methods and modalities to enhance the borrowing capacity of the Single Resolution Fund. The purpose is to ensure adequate funding can be provided by the fund at all times. I expect the regulation on the SRM will now be formally adopted before the European Parliament rises for elections.

Taxation was also included in the agenda for last week's meeting. On this item, I was pleased that the European Council could finally welcome agreement on the savings tax directive. Ireland supported the directive which I see as a significant contribution to EU and international efforts to combat tax fraud and evasion.

Climate change and energy were also a focus at last week's meeting. My colleagues and I held a first policy debate based on the European Commission's communication on the framework for climate and energy to 2030. This represents the next phase in the European Union's transition to a competitive, low-carbon economy by 2050. The issue requires careful consideration. Ambition and flexibility are important features of the package. However, the outcome must also be sustainable on environmental, economic and competitiveness grounds for the Euopean Union and individual member states. We support in principle the proposed targets set out in the Commission's communication, namely, a 40% reduction in EU-level greenhouse gas emissions and a proposed EU-wide 27% target for renewable energy by 2030.

We need to be ambitious, but we also need to be very clear about the commitments we undertake. We need good and agreed data on which to base decisions. The European Council agreed on the need for further urgent analysis of the implications for member states of the proposals for emissions reductions and renewable energy. I made clear that for Ireland, particular account must be taken of the role of agriculture. This is already set out clearly in the Commission communication, and during discussions at last week's meeting, President Van Rompuy was reassuring on this aspect. Therefore, the agri-sector is confirmed as being part of the flexibility in reflecting national circumstances in the decision mix made. This is important from Ireland's perspective. We believe that a coherent and cost-effective approach to the parallel priorities of sustainable food production and climate change is fundamental. A realistic way forward at national, EU and wider international level under the UN convention requires such an approach. Leaders also called on the Council and the Commission to elaborate on mechanisms for fair effort sharing and to modernise the energy sector, prevent carbon leakage and develop an energy efficiency framework. We will take stock of progress on these issues at the June European Council meeting, with a view to taking a final decision by October 2014. This will facilitate an agreed EU position at the UN Climate Conference in Paris in 2015.

The European Council also agreed to accelerate efforts to complete the internal energy market this year, including through increased electricity interconnections, including in the Iberian peninsula, the Mediterranean region and the southern corridor from eastern European countries. Discussions on energy, and energy security in particular, had an added urgency in light of the Ukraine crisis. The Commission has been asked to prepare a detailed analysis of Europe's energy security and a comprehensive plan to reduce energy dependence in time for the June European Council. The Council also agreed to support the development of other sources of energy supply, including examining ways to facilitate natural gas exports from North America to the European Union. We will consider how this may best be reflected in the transatlantic trade and investment partnership, TTIP. This refers specifically to liquefied natural gas.

To conclude, I hope I have given Deputies a reasonable overview of the discussions that took place last week.

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