Ms Viviane Reding:

Thank you, Chairman and honourable members. I greatly appreciate the opportunity to come here to help prepare for Ireland's Presidency of the Council of the European Union. I know from experience that previous Irish Presidencies were great and helped to move Europe forward.

Ireland and Europe have been working together since 1973 to overcome difficult and complex problems. We have overcome those problems in a joint venture. Do Members recall the Irish Presidency in 1975 and the decision on the European Regional Development Fund? Irish citizens should certainly remember it given Ireland has in the past five years received €751 million from it. It is a real instrument for solidarity, of which there are many in Europe. It is good to remind people of this as they have a tendency to forget quickly. The Structural Fund was established to support the poorest regions in Europe and to share prosperity grounded on the system of solidarity. I have already mentioned the amount of money which Ireland has received from the fund during the past five years. Since joining the European Union, Ireland has received €17 billion to help its citizens.

The Irish Council Presidency in 1979 was the first session of the freely elected European Parliament, which was a historical step and the beginning of the Europe of citizens. In 1990, the Council Presidency brought forward the decision to convene the conventions on economic and monetary union and on political union. In 2004, the Irish Presidency steered the biggest enlargement, welcoming ten new member states. It is sometimes good to recall the past in order to see where Ireland stands. I am confident that the forthcoming Presidency commencing on 1 January next will be a great one, and will move Europe forward.

When we speak about bringing Europe a step forward and a great Presidency, it is not to hide that there are significant problems. I need not tell the committee members because they are in day-to-day contact with their citizens but there is a crisis in Europe. The citizens tell the members about the problems they have with making ends meet, with not finding a job and so on. We have to work together to overcome this crisis. However, I believe the most important crisis is one of confidence. We see our citizens beginning to lose confidence everywhere, not only confidence in Europe, but confidence in the national government and the national parliament. The Eurobarometer survey shows that the confidence of citizens has gone down steadily not only in this country, but also in other member states. This is important because one cannot represent citizens, whether in parliament or in government, and make policies if the citizens do not trust that one makes the right policies. It is of absolute importance to restore this confidence and we must work together in this endeavour.

I realise that some Irish citizens have questioned the fate of our common currency and Ireland's place in Europe. I imagine this is one of those moments in history where, when things are going bad, one questions everything. However, one should see that the euro is not the problem, but the solution. If there had not been a euro or European solidarity, the fate of the citizens would be much greater.

We are riding out of the storm at the moment and it is important to be true in the analysis we make. When things are going bad, one should say they are going bad and say what one is doing to get out of it, but when there is light at the end of the tunnel we should also say so without exaggerating or saying that everything is done and there are no problems to be solved any more. We should also remember the efforts made by the European Union and, most of all, by the Irish people and the Irish Government. They are riding out of the storm. Ireland has gone back to the debt markets after two years of absence and that is an important moment. The Irish economy will grow this year, reaching almost 2% growth. That is higher than in the United Kingdom, France or Germany. The Irish fiscal deficit is set to fall below 8.6% and this was the target for 2012. This shows that the programme remains firmly on track and that things are moving in the right direction.

Having said this, we cannot ignore that there remains a long way to go. The members may wish to hear from me where Europe comes into this. They know perfectly well what they have been doing and what their citizens have had to do and how the Irish Government has been fighting to get out of the situation. What have we done to help Ireland to get out? As with many occasions in the history of Europe, a crisis is not a time to stand still but to go forward. A standstill takes place when everything is fine. We lean back and we say everything is fine and that we should wait and do nothing. When there is a crisis, then we see where the deficits are and where we have to move to solve the crisis and not to allow a new crisis to develop.

Let us consider what has been done in recent months in Europe. It is impressive. As parliamentarians, the committee members will know all about the European semester whereby the whole of Europe examines the budgets of the neighbouring countries. Why does this happen? It is because we have seen that if one budget gets out of control, it has an impact on other member states. Could we have imagined it two or three years ago if someone had said that we share a common responsibility for national budgets? No one would have believed it could ever be done, but it is important that it is done in order that we can help each other and that we do not deviate from the right track. The European Stability Mechanism will be a new testament to European solidarity. It will act as a sail, pulling troubled economies out of danger and into calmer waters. The proposed banking union is absolutely necessary to solve the problems of the banks and to prevent the build up of new problems such as those which people in Ireland have experienced. The banking supervisor was put on the table by the Commission on 12 September. All summer long, from the end of June to 12 September, our people were working to make this possible. What is the aim? Never again will banks remain unregulated and unaccountable. Never again will a nation's people pay the price of its banks' mistakes and never again will problems in one country spread unchecked to the countries around it. That is the aim of the European banking supervisor.

However, the crisis of confidence is not only a lack of confidence in the economic capabilities of the eurozone members, but also a crisis of confidence in politics in general and, specifically, in European politics. It is important that we go back to the grassroots. Do we speak with our citizens? By "we" I include everyone in Europe: local government, regional government, national government, European government and the parliaments. When do we go to speak to citizens? We do it when we want something from them in election campaigns or in referendum campaigns. In between are we really going to the grassroots? We have 27 different systems where we proceed at a dazzling speed and at European level too. There are complex systems and solutions but we have never really explained to our citizens where we are heading. We have never really explained to citizens how the system works, unless the committee members have done so during the referendum campaigns. It is of the utmost importance not only to gain the confidence of the financial markets, but also to regain the trust of our citizens. We have moved from a growth compact to a fiscal compact and we must go to a legitimacy compact that includes our citizens.

Having said that, the European Union is already a very democratic system. We have a directly elected parliament which is part of a co-decision system. The European Parliament is one of the main players to decide for or against European laws. A European Commissioner must go through a sound and hours-long hearing before securing the acceptance of the European Parliament. I am unsure whether there is something similar for the Ministers in this country. Anyway, that does not exist in most countries.

There are checks and balances at European level but the process is much more under parliamentary control than the appointments of Ministers in most member states. For instance, I can be removed at any time from my post as Commissioner by the European Parliament. The national parliaments have also gained, with the new Treaty of Lisbon being a significant influence on the way European policies are decided.

The current crisis has served as a sobering reminder of how we are all in the same boat and a decision taken in Ireland, for instance, has an impact on the neighbouring countries. The recipes of the past, which included individual and unco-ordinated action, have led to excesses of debt and endangered trust and confidence in our economies. Member states have granted Europe greater powers but have also imposed new checks and balances. One cannot have increased powers without a parallel system of checks and balances. It is a question of how to achieve this balance by getting the necessary common decisions on policies in parallel with a necessary democratic common system of checks and balances. I believe we need to go a step further, and this has already been inscribed in the decisions we have taken. For instance, the decision to have a more economic Union, which is mainly intergovernmental so far, has inscribed in the text that this needs to become part of the European treaties as from 2018. In order to implement the decisions of today we will need a treaty change in the future and it is a question of how to change the terms of treaties. Will the decision be taken behind closed doors and then brought to the citizens? I propose that it should be done another way. For the first time in the European system we need to integrate the citizen before we sit down to decide on what treaty changes will be necessary.

With this in mind, on 9 May 2012 I launched a programme of dialogue with the citizens of Europe. The first step was an Internet questionnaire for citizens and it was mainly young citizens who responded. The Internet is a young medium and that is why young citizens responded. However, they needed to take time to answer the questions posed and they took that time. This illustrates that there is an eagerness and a willingness on the part of citizens to be consulted beforehand. Before we start to think about the next step we must include citizens in the discussion. That is the reason that 2013 will be the European year of citizens. It will mean that all citizens, such as the committee members, rather than Commissioners such as me will play an active role.

I am speaking tomorrow to the European association of mayors and presidents of regions to explain to them that it is their responsibility to reach out to citizens. All elected representatives have a responsibility to go to the grassroots and to have discussions with citizens. The discussions will be about the meaning of belonging to the European Union, the added value of being in the Union and what improvements are required. It is a means of finding out what the citizens think about Europe and what they think is working well or badly and also to hear what are their hopes for the Europe of the future. This is to be a serious discussion with citizens outside of any voting imperative - there are no European elections in 2013, nor is there any European referendum planned. There might be other referendums in this country and also national elections are planned for 2013 in other member states, but this discussion with the citizens of Europe will not be part of any election campaign. The year 2014 will be the time for the election campaign for the European Parliament and it will be the turn of the political parties who will have to do their job to win votes.

In his speech on the state of the Union, President Barroso set out the way forward for Europe. We will have discussions with citizens and with national parliaments to see how sovereignty needs to be shared in order to help our economies to survive and to make a place for Europe in a globalised world so that it is regarded as a significant entity.

The European Union is linked together by the rule of law and by solidarity among member states. Decisions must be agreed by means of the normal procedures. Once a new European Parliament is elected it will elect a new Commission from 1 January 2015. It will then be time to call for a new convention, but only once the discussions with citizens have been held in 2013 and once the citizens have made their decision in the European elections in 2014.

We need to do things differently. Everyone knows my position and also the position of the President of the European Commission in this regard. We want a political union. We have seen very clearly that in order for the Parliament and the national parliaments to have basic control of fiscal and economic matters we need to go a step further towards political union. However, this political union must be decided by all. That is why I have come to Ireland to say that the European year of citizens will begin during the Irish Presidency. I hope that the first official meeting of a citizens' dialogue in 2013 can be held in Dublin Castle and that it will be attended not only by the Taoiseach but also by the people of Europe, and not only by the citizens of this country but by citizens of other countries. This will be a great moment which will see power being returned to citizens where it belongs.