Ms Catherine Day:

It is a pleasure to have an opportunity to engage in this exchange of views. I wish to set out and follow very much the structure the Chairman has outlined, but before I do so, I will set the scene. I will be very happy to engage in a discussion afterwards, including on topics I have not raised which might be of interest to committee members.

It is always a good practice at the start of a new year to take stock and see what is coming down the track. This will be a year of big political change throughout the European Union. We will have a new Commission, Parliament and President of the European Council. We will have many new officeholders who will be in charge of driving the Union forward. They will face a number of big challenges and probably the most immediate is how to sustain growth. A fragile recovery is under way and we must consider how to underpin and strengthen it.

The topic on which I wish to spend most time today is how to get more national ownership of the new economic governance process the European Union has put in place. As the Chairman stated, those of us with the euro as our common currency must share decision-making in the future; therefore, how can we get more national ownership?

Another big issue on the agenda for the new officeholders to whom I referred will be the particular matters of relations with the United Kingdom and the wider debate about subsidiarity and where the European Union should be involved. This will be very much at the centre of the agenda. I hope that as we put the crisis behind us, the European Union can also look at the wider world, having inevitably had a very internal focus during the years of the crisis. Committee members know we are engaged in very big and exciting trade negotiations with the United States and other partners. I hope that in the next five years our agenda will include a much wider look at the world.

I congratulate Ireland which had a very successful Presidency in the first half of last year and a successful exit from the programme at the end of last year. In European terms, 2013 was certainly a good story for Ireland. I want to consider what exiting from the programme means. It still means major engagement with European partners. We certainly draw the lesson from the crisis that one cannot have a common currency without much closer co-ordination of policy. During the crisis years we were trying to put in place instruments which would allow us to work more closely together. These go from building up funds to help member states in difficulty to having regular surveillance to avoid problems starting in the first place. To use the inevitable Brussels jargon, we want to put more emphasis on the preventive than the corrective.

In the heat of the crisis many necessary decisions were taken, but they were quite complex. What we are now trying to do is to explain better to people what is behind all the legal jargon and what it means. I like to explain it in terms of an annual health check. When one goes for an annual check-up, one undergoes many different tests. At a certain point one sits down with the doctor who interprets the results and gives guidance. The guidance could be that one should take more exercise or lose some weight, or that one has serious problems that must be acted on immediately. Often it is not just a one-to-one exercise between the person and the doctor; it is also the person and the family. Similarly, with regard to European economic governance, it is about doing the tests on how the economies are doing - sitting down, first, with the Commission, who interprets the tests and makes recommendations, but then discussing with the family of the other member states, particularly those who are in the euro, what has to happen in the coming years. That is a very simplistic way of describing what is very complicated and very calibrated. There are different rules for the euro and non-euro areas and for countries in severe difficulty, countries with not too many problems and a whole range in between. Basically, it is about making sure that in the future we are aware of problems as they emerge and that we intervene long before the problems get to the scale of what we have been dealing with in recent years.

For me one of the most important moments of the cycle is in May. This is when, once a year, the Commission sits down with all the analyses, looks at the results of the different tests and gives an opinion on where we see a member state in relation to where it has agreed it should be, and the Commission makes recommendations. Just as in the annual health check, one can ignore the doctor's advice, but then there are consequences. In the European system there are sanctions and fines if countries repeatedly ignore recommendations that have been decided together. Long before the European system gets to apportion consequences, as we have seen in the crisis, the markets judge very quickly. If they do not think a country's economic policy is credible there is a fairly savage and immediate reaction long before the processes in Brussels get to conclude that a country is out of line. Part of all of this process is about transparency; it is about putting the data out there and collectively drawing the conclusions.

We are in the European semester, the first half of the year. This is the fourth time we have done it. We have now reached a good working partnership with the member states, also involving the European Parliament and the national parliament. I would like to provide one chart which shows a summary of the year and what happens. I hope this is a reasonably accessible summary of what happens at different points in the year. It is clear from the chart what the Commission does in the different months, what the European Council and the Council do, what the member states do and what the European Parliament does, including when it works with national parliaments.

The role of national parliaments is very important for us because we would like to have all of this discussed nationally in order that one gets the buy-in, that people do not see all of this economic governance as being decided far away in Brussels and imposed on member states but rather that it is a participatory process. Certain things are decided nationally and certain things are decided collectively in the European Union. The involvement of national parliaments varies from one country to another but national parliaments vote on national budgets, as members will be aware, because Ireland also had to change the timing of its national budget as a result of things that were agreed at European level. From now on, the Commission issues opinions on draft budgetary plans in November of each year and then makes recommendations the following year based on that. We have all aligned a cycle of when we take decisions so that we can then draw conclusions together. All of this needs to be not only debated nationally but explained nationally in terms of the positive effects of taking economic policy decisions together, and we also have to be open about the constraints that go with the benefits of belonging to a common currency area.

All of this is about organising a process so that political-level decisions can be taken based on the soundest possible economic analysis. That is why all of the euro member states have agreed to set up independent fiscal authorities so that the members are detached from policy making in order that the sound basis is there for everyone to see. It is why the euro area countries have now enshrined a debt brake in their national legislation but it is also why the Commission is making a particular effort to provide much more information to national parliaments. As members are aware, there is not only the willingness of commissioners to come to national parliaments but also the possibility for national parliaments to call the economics Commissioner to appear before them if they want to debate the policy decisions that are being made.

I will make two final points. We are working to step up our interaction with national parliaments. In our representations - Barbara Nolan is our head of representation here - in all the non-programme countries, of which Ireland is one, we will have two dedicated European semester officers. Their job will be to reach out to national parliaments and stakeholders such as the social partners and provide a two-way channel, passing information on each country to the Commission and then being available to give briefings on how the Commission is thinking and what is the import of decisions either taken or to come. I would encourage the committee, once these officers are appointed in Dublin, to make use of them as a link between the European and national levels.

Finally, I wish to make a request. The committee is aware that Europe has a growth and jobs strategy, which we call Europe 2020. We will be reviewing it this year and will then launch a public consultation to run between April and the autumn. It is about gathering the input to design the post-crisis growth strategy for the European Union. Nobody is better placed to respond than Ireland - having just come through a most difficult time, having successfully exited from the programme and having lots of ideas about where growth should come from - so I would like to see a solid and strong input from Ireland. I give the committee advance notice that the invitation will come, but I hope it can be taken up, including by the Oireachtas. This is an opportunity to influence European policy. As a country that has been through much in recent years, Ireland has a particular take on it. I hope we can get a very strong input from Ireland.