Ms Emer Costello, MEP:

I would like to focus my remarks on the European Parliament Committee on Employment and Social Affairs, of which I am a member, and to elaborate on what we are trying to achieve in that forum and how we can work towards increasing solidarity and developing a more social Europe.

The principles and values that underpin the European Union are written into the treaties of the European Union.

The emphasis is on respect for human dignity and solidarity. Article 3 reads: "The Union's aim is to promote peace, its values and the well-being of its peoples." We are also committed to establishing an internal market and the sustainable development of a social market economy, one that enjoys full employment, combats social exclusion and discrimination and promotes social justice and protection. The internal market is not an end in itself, but a means to an end.

Under the Lisbon treaty, the social clause requires the Union to take account of the promotion of high levels of employment, adequate social protection and the fight against social exclusion in all of its policies. However, these values and objectives are nothing unless we can transform them into a political programme. This, in turn, is determined by the balance between political ideologies in the institutions, the European Parliament, the European Council and the European Commission.

We have the basis for a good political programme to give effect to the EU's core values and objectives in the form of the EU 2020 strategy, which sets five headline targets - a 75% employment rate, a reduction in the school drop-out rate to below 10%, a reduction in the number of people at risk of poverty by at least 20 million, a public and private investment of at least 3% of GDP in research and development and innovation, and a reduction in greenhouse gas emissions by 20%, renewable energy production to reach 20% and a 20% increase in energy efficiency.

This strategy is worth striving towards. A recent study indicated that, having reached a 75% employment rate, the EU would not only halve the employment rate, but would also generate up to €1.2 trillion in extra revenue for national budgets, the equivalent of 7% of GDP. The economic crisis is impacting on member states' ability to pursue this strategy and is exacerbating poverty and social exclusion. We are aware of the problems facing people in Ireland.

Across the EU, almost 120 million people, including 25 million children, are at risk of poverty and social exclusion. More than 40 million suffer from what is called severe material deprivation - for example, an inability to pay household utility bills, including heating. Europe's unemployment rate now stands at 10.8%, with 26.2 million people unemployed. Youth unemployment is 23.6%, some 5.7 million people. The number of young people not in education or training is almost 8 million. In Ireland, the youth unemployment rate is unacceptably high at almost 30%. Other countries are facing even more serious challenges. For example, Greece is heading towards a 60% youth unemployment figure and Spain and Portugal are over the 50% mark.

The statistics show that all member states are grappling with the same problems to a greater or lesser extent, but some are doing better than others. For example, Austria's unemployment rate is 5%. The risk of poverty and social exclusion in the Czech Republic, Sweden and the Netherlands is well below the EU average.

President Barroso told the European Parliament in his state of the Union address that it was those European countries with the most effective social protection systems and the most developed social partnerships that were among the most successful and competitive economies in the world. As such, there is a correlation between well designed social spending on the one hand and competitiveness on the other. Therefore, Europe should view sound social spending not as a compensation, but as a positive investment in prosperity and inclusion for the future.

This is the core idea of the social investment package presented by the social affairs Commissioner, László Andor, two weeks ago. The Commission presented this package because it now recognises, as my group in the European Parliament, the Progressive Alliance of Socials and Democrats, S&D, has long argued, that we must shift our focus towards investing in people. For this reason, it is important that the multi-annual financial framework, MFF, be fit for purpose. We want 25% of cohesion funding to go towards the European Social Fund, ESF, and 20% of member states' ESF spending to be on social inclusion and combating poverty during the period in question. Social investment focuses on policies that prepare people for life's challenges rather than waiting to repair the consequences of failing those challenges.

I have limited time today, but I will mention two initiatives in which I am involved, those being the European youth guarantee and the fund for European aid for the most deprived. The youth unemployment statistics are unacceptable. The best way to return people to work is to grow the economy. We must build on the Compact for Growth and Jobs, which was agreed last June. In particular, the €10 billion increase in the European Investment Bank, EIB's capital fund will allow substantial investment in small to medium-sized enterprises, SMEs, an issue that I have raised in the European Parliament.

The youth guarantee can help us to tackle youth unemployment. Under the scheme, young people would be offered quality jobs, job placements, internships, traineeships or further education after four months of being out of education or employment. The €6 billion agreed by the Council of Ministers on 8 February is insufficient, but it is a start. It is also a sign of a commitment to tackling the issue. Further work is necessary.

Second, the feed fund will replace the current food aid programme, which involves the distribution of surplus stocks to those who are most in need. The fund for European aid to the most deprived is worth €2.5 billion and will replace the food aid for most deprived persons, MDP, programme. The money can no longer come from the agriculture budget or intervention stocks. The feed programme's interesting aspect is that it builds on the MDP programme while also incorporating some social inclusion measures. It will come from the social affairs budget. I am the European Parliament's rapporteur in this regard. I have been working with NGOs involved in the issues of food deprivation, child poverty and homelessness in putting the report through the European Parliament.

These two initiatives reflect some of what I mean by social investment. The Seanad discussed the matter last week. We must embed this approach more securely in the EU's architecture. We have agreed new rules for the monitoring and co-ordination of member states' fiscal and economic policies. We have developed policies for growth and employment. Sound public finances are necessary to develop such policies.

Last June, President Van Rompuy presented a paper, entitled "Towards a Genuine Economic and Monetary Union", which emphasised closer integration in four respects, those being, the financial sector, budgetary matters, economic policy and strengthened democratic accountability and legitimacy. These are vital. For example, a banking union is essential and, since we have a common currency, we need to be able to co-ordinate our economic and budgetary policies. The European Parliament must play an important role at each stage of the European semester and must be involved in the functioning of the European Stability Mechanism, ESM, and in monitoring the troika. National parliaments also need to be more involved.

However, the social pillar was missing from the Van Rompuy paper. This was a mistake. The European Parliament's contribution to the debate, adopted last November, sought to redress the imbalance by making concrete proposals on a social Europe as a fifth pillar and as one of the essential building blocks for economic and monetary union, EMU. We are seeking a social pact. According to Commissioner Andor, if member states want to pool more financial, budgetary and economic sovereignty and want the process to have democratic legitimacy in the eyes of the citizen, employment and social problems need to be addressed.

The discussions on how the social dimension of EMU could be strengthened must be the focus of our discussions. The matter was discussed at the Social Affairs Council. I understand that the Irish Presidency is preparing a paper on these discussions. There are difficulties in developing and advancing a more social Europe in the current climate but it is an objective that we must aim for. Otherwise Europe will become synonymous with bailing out banks at the expense of the people. It is in the interests of all of the people that we develop a social Europe.

We are seeking a European social pact which would identify the social investment measures that should be taken by member states with the support of EU funding, particularly the ESF, over a given timeframe in order to meet the EU 2020 strategies. There is a window of opportunity to move towards the objective. The December Summit also made reference for to need to balance productive public investment needs with fiscal discipline objectives.

To conclude, I welcome that serious attention is being given to social Europe at EU level. There is a great challenge facing EU member states on strengthening social Europe but the June summit must aim to make concrete progress towards a binding social pact. That is the important aspect. It must be binding in the same way that economic regulations are binding. We must ensure that the our fiscal objectives are reconciled with social and employment aims and that we can progress to achieve the Europe 2020 strategies which is in all of our interests.