Oireachtas Joint and Select Committees

Wednesday, 5 July 2017

Joint Oireachtas Committee on European Union Affairs

EU Presidency: Engagement with Estonian Ambassador

2:00 pm

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry, Independent)
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On behalf of the committee I would like to welcome Her Excellency Mrs. Kristi Karelsohn, Ambassador of Estonia to Ireland. The ambassador is here today to discuss the priorities of the Estonian Presidency of the Council of the European Union. This is the first time that Estonia has held the Council Presidency and we in Ireland look forward to it. We know that sometimes it is the smaller countries who can run the most efficient and effective EU Council Presidencies, building the necessary coalitions and putting the interest of the union to the forefront. Estonia also has a reputation as being a world leader in the digital and digital governance space. We hope Estonia will be able to bring some of that experience to the table. The committee is very interested in hearing about the work and priorities the Estonian Government sees ahead for its challenging six months. Some months ago I had the privilege of meeting the ambassador. We held a good discussion on matters of mutual interest and especially in the context of Brexit and what it would mean for Ireland and Estonia. The ambassador is very welcome.

Members are reminded of a long-standing parliamentary practice to the effect that Members should not comment on, criticise or make charges against a person outside the House, or any official by name or in such a way as to make him or her identifiable.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they are to give to the joint committee. If, however, they are directed by it to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence.

Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable.

I invite the ambassador to make her opening statement.

H.E. Mrs Kristi Karelsohn:

I thank the honourable Chairman and members of the committee. I am very happy to present Estonia's priorities here. As a first time Presidency for Estonia, it is a very exciting time ahead of us. We all feel that we have to take a great responsibility in the role and take the European agenda forward.

There is no need to assure anybody that it is not the easiest time for the European Union, when we are taking up our Presidency. First there was the eurozone crisis that shook the fundamentals of our common currency. Then there was the migration crisis - far from over today – which started to pose new challenges for our unity and collective operation. A year ago, after the Brexit vote, people started to ask existential questions about the future of our Union. The increasing threat of terrorism, both in the real and cyber worlds, also contributes to the turbulence and instability for the European Union lives in.

The overarching aim of the Estonian Council Presidency is to ensure that - despite all the global and local challenges - the EU remains united and decisive. We must keep looking for issues, initiatives and ways that unite us, and not for those that pose a risk of dividing member states. We should look for initiatives that balance things and build bridges.

One of the most challenging developments in that regard is Brexit which, as a topic, is not mentioned among their priorities. It will no doubt be a very controversial topic and a factor in financing the EU's work, at least for the next couple of years, but the main responsibility in the negotiations lies with the Commission and its chief negotiator. Estonia, as President of the Council, will be at the service of the 27 member states and will work closely with other EU institutions to ensure as smooth and constructive a Brexit process as possible. However, we would like to avoid Brexit being in the centre of our Presidency and see the Union moving forward with its everyday agenda. Despite the difficulties being posed by the negotiations, the Union also has to preserve its unity.

Despite, and even due to, these challenges, the EU has to look forward. The White Paper and reflection papers by the Commission, and several reports by the European Parliament, give us a good basis for discussion about the future of the EU. We must not forget, however, that it is not the institutional set-up that is the most important aspect, but that our citizens must be at the centre of our attention. Delivering concrete measures for our citizens is what the Estonian Presidency will strive to achieve.

We have four equally important priorities for the Estonian Presidency. First is an open and innovative European economy. Second is a safe and secure Europe. Third is a digital Europe and free movement of data. Fourth is an inclusive and sustainable Europe. We also have two cross-cutting issues on our list of priorities, which are the Eastern Partnership and the digital agenda.

On our first priority, an open and innovative European economy, an open Europe means creating better opportunities for its citizens and businesses. A strong Single Market is a key driver of economic welfare, but it is not yet complete. To support growth and competitiveness, we must ensure providing services and starting business in the EU is easy and that rules are transparent and predictable. We need to create new funding opportunities for companies and a stable banking sector. These objectives could be achieved by protecting and promoting the EU's four freedoms and facilitating the freedom of establishment and cross-border mobility of companies. The European economic and monetary union has been strengthened in recent years, but much is still ongoing. It is necessary to complete the second stage of the creation of the European banking union and work must continue on implementing the capital markets union.

Guided by the principles of the European energy union, the Estonian Presidency focus is on the new electricity market design, which provides an essential basis for a single European energy market. Estonia will co-ordinate the clean energy package and seek agreements on practically every aspect of the package.

In the era of the slowdown of globalisation, trade is no longer an EU policy that enjoys unconditional support, but Estonia believes in free trade and stands, together with Ireland, in defence of it. We hope to finalise the agreement with Japan. There is an opportunity for a political agreement tomorrow at the EU-Japan summit. We also want to make progress on other agreements such as Mercosur and those with Mexico and other countries.

With regard to a safe and secure Europe, the security situation in Europe and its neighbourhood countries remains complex. Terrorism, organised crime and the protection of the EU's external border remain a high priority. The migration crisis proves that Europe cannot ignore the events unfolding outside its borders.

It will come as no surprise that Estonia intends to put greater emphasis on defence co-operation and levels of defence spending to enhance European military capabilities. We also hope for the European Parliament's support in setting up the European defence fund. Estonia will join the Permanent Structured Cooperation, PESCO. In addition, we want to move forward with EU-NATO strategic co-operation for tackling hybrid and cyber threats, inter alia.

We believe internal and external security is indivisible. Estonia supports the High Representative in implementing the global strategy. We are ready to contribute to the strengthening of transatlantic ties, supporting the implementation of the objectives of the European neighbourhood policy and ensuring the EU's political focus remains on the Eastern Partnership, which is one of the cross-cutting priorities for our Presidency, as mentioned.

In recent days, the level of migration has reached new peaks. It is an issue that got a good deal of attention in the previous session here. In our view, the most important aspect is co-operation with third countries to deal with the root causes of migration. We have to protect those who are entitled to international protection and at the same time strengthen our external borders, implement an effective return policy for those who are not entitled to stay, and fight against trafficking of people and irregular migration.

One of the main Estonian priorities is the reform of the European common asylum system. We must continue creating databases and modern IT solutions that allow for rapid exchange of information when needed. To improve the exchange and use of information, we will continue the work towards interoperability of different IT systems and databases.

That leads me to our favourite topic and the third priority, which is DigitalEurope and the free flow of data. It will come as no surprise to anyone that one of our priorities is DigitalEurope. We see technological innovation not as an objective itself but as a tool to make the lives of people, companies and governments more effective. We believe that making good use of technology will be the key to success for Europe.

Our Presidency will focus on the establishment of a digital Single Market, increased use of e-solutions and data as well as on the development of cross-border e-services and cyber defence. We have planned around 45 events and meetings directly or indirectly related to digital topics. About half the informal Councils and four Minister’s meetings also have a digital dimension. The most important event, as mentioned by the Minister previously, will be the digital summit in September in Tallinn.

We will also aim at introducing new smart IT solutions to make the EU function more efficiently and easier to understand. In the same way, the free movement of data is something that concerns all European policies. Data is the raw material of the information society that makes the flow of capital, people, goods and services easier, faster and more affordable. Today, this potential is not fully exploited within the Single Market. The free movement of data, as the fifth freedom of the EU besides the existing four freedoms, is a future-looking debate that Estonia wishes to initiate. Better cross-use of data is needed for better decision-making, efficiency and fighting common threats like terrorism and cyber crimes.

Doing that, one cannot overlook the fundamental freedoms of our citizens. The free movement of data needs clear rules. We need to find ways to ensure the data is used in a secure way for our individual and collective benefit. That involves data protection and privacy, new technologies, cutting edge infrastructure and all other enablers and restrictions on the movement of data. Also, Estonia is ready to share its wide experience here. Among other things, I was delighted to speak at the recent data summit in Dublin about how we have built trust in an Estonian digital society. More concretely, we want to focus on the removal of unjustified data localisation requirements; promoting a once only principle for eGovernment services; and creating clear rules on data access and portability.

The fourth priority is an inclusive and sustainable Europe. We believe that economic achievements alone do not bring happiness and prosperity for European people, but we have to seek a balance between economic, social and environmental goals. Inclusive Europe supports equal opportunities for employment, access to services and social inclusion.

When moving across borders, equal opportunities also mean fair mobility. To promote the free movement of persons, workers and services and supporting social guarantees, Estonia will continue the work on social security co-ordination regulation.

A sustainable European Union cares about and contributes to a cleaner environment and a more balanced economic model. We want the European Union to stay committed to the Paris Agreement and a 40% reduction in greenhouse gas emissions by 2030. We aim to make progress on all climate policy files and look forward to productive collaboration with the Parliament in advancing them.

I thank all members for their attention. I am happy to take comments or questions they may have and engage with the committee in the future during our Presidency.

Photo of Gerard CraughwellGerard Craughwell (Independent)
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I thank the ambassador for her presence and congratulate Estonia on its first term of the EU Presidency. I wish Estonia well. It has a big job ahead in the next six months or so and I wish it the very best of luck.

I am reading through priorities of the Estonian Government which the ambassador has set out in her presentation, starting with the finance model. I am very interested to see a reference to an attempt to finance small start-ups because that is the future of businesses. One thing I have seen both in this country and the United States is the use of microfinance in establishing start-up businesses, but, unfortunately, to move to the next stage, they depend on venture capitalists. We had this discussion last week in Germany, for example. Venture capitalism, taking chances and so on do not rest easily with the Germans and, to a certain degree, we are very limited in this country. I would, therefore, like to see second-tier finance available to small start-ups through the European system. If this were to require the European Union to take some equity in companies as they grew, I am not so sure that would be bad, at least in the initial stages.

The ambassador talked about stable banking. What is it? Does it entail shareholders being satisfied or the needs of the public being met? There has been a dramatic recovery in this country and the Government should be very proud of where we have got to. However, it has not been without significant pain, as the ambassador will know, having lived in the country. I know of a young couple who have paid €82,000 in rent and they are being refused a mortgage by the bank because they have no savings. How are they going to have savings when they are paying such rent? As they have the capacity to repay loans, the banking system must change to meet the needs of society. Perhaps Estonia might consider this issue during its Presidency.

On taxation, the committee has already heard me speak about the corporate entities that move to using cheap labour. The European Union must find a way to tax these companies because they do not drop their prices. They avail of cheap labour, but the price remains the same. A company that manufactures runners or sportsgear in County Meath sells a pair of shoes for, say, €200. It moves its manufacturing base to China and makes the shoes for a fraction of the cost, but it still charges €200 for them. We must find a way to penalise such companies in order that we can invest in the third countries from which there is migration. This is something I would like to see happen and this is the where I talk about Estonia's aspirations to have fair competition. Fair competition can only happen through taxation. If one moves from a country in which labour is expensive to one in which it is cheap, we must equalise the position through the taxation system. That is my view of the direction we should take.

I believe organised crime is a big issue confronting the Estonian Presidency in the first instance. It never ceases to amaze me that the military can co-operate across Europe but that police forces do not necessarily co-operate at the same level, with the result that - the ambassador will know this, having lived here - we have organised crime bosses living in Spain but who are directing operations in this country. We must find a way of working across the European Union to ensure there will be no hiding place for them.

The committee has heard what I have to say on the issue of migration. During its Presidency I hope Estonia can come up with a methodology to allow us to enable but control economic migration because that is the real issue. Refugees account for a very small part of the numbers crossing the Mediterranean. I know that the European Union is doing a lot of work on this issue.

I worry when I read the words "EU-NATO [closeness and] co-operation". Ireland is a neutral country. Any closeness to NATO brings us close to those who have caused the destruction of Syria, Palestine and parts of Iraq and Afghanistan. We see on television the modern cities in Syria that have been razed to the ground with bombs and bullets supplied by the West. More horrific is the fact that we no longer have to risk soldiers' lives on the ground; drones can be sent that are managed somewhere in Texas to bomb the hell out of these countries. Until we stop this from happening, I certainly do not want to see us getting anywhere close to NATO or involved with NATO that believes it is the conscience of the western world. We really do not want that to happen.

I hope to see something to tackle climate change come from Estonia also.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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Her Excellency, the ambassador, Mrs. Kristi Karelsohn, is very welcome. I thank her for putting forward the plans for Estonia's Presidency of the European Union in the next six months. As she will be aware, Estonia joined the European Union on 1 May 2004 and has since played a very important role as one of its youngest members. It has made great strides and a very good contribution. I wish it success in its Presidency. I look forward to visiting Tallinn on behalf of the Chairman on Saturday and Sunday, with staff of the committee. I will represent the committee at the meeting of the Conference of Parliamentary Committees for Union Affairs of Parliaments of the European Union, COSAK.

I commend Ryanair for forging links with Estonia. It is an Irish company which was established by Dr. Ryan many years ago and it is good to see it linking with Estonia in the form of regular direct flights between Dublin and Tallinn. I know that the ambassador presented her credentials in September 2014 to President Michael D. Higgins in Áras an Uachtaráin and that she has been very active since in travelling around the country since, including visits to Dundalk and other areas. I say, "Well done," to her on her initiative in being a very good ambassador here. As for what she said, the fact that she is putting first the citizens of Europe, instead of the institutions, is very important. The citizens of Europe, not the institutions, should be at the forefront. In a sense, one of the difficulties with and one criticism of the European Union is that it has become too distant from the people.

I wish Estonia every success in its Presidency. It is a great honour to hold the Presidency of the European Union for the first time. Following Malta's success, Estonia is taking on the responsibility at a very crucial time in the first six months of the real Brexit negotiations. It will host the leaders' meetings later in the year also.

I thank the ambassador for her presence and know that the Chairman has been in touch with her directly. I ask her to continue to keep in touch with the members of the Joint Committee on European Affairs.

Photo of Seán CroweSeán Crowe (Dublin South West, Sinn Fein)
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I wish the ambassador and her country well and every success in holding the Presidency of the European Union for the first time. I have a few questions to ask and comments to make.

The ambassador referred to "an open and innovative European economy." I understand this involves the protection and promotion of the European Union's four freedoms: the free movement of goods, persons, services and capital. As I am sure the ambassador will know, Brexit poses a real challenge to Ireland in that regard. It threatens to impose a possible hard border on the island and physically stop these four freedoms. Will the Estonian Presidency explore these issues separately from the negotiations? Will Estonia be involved in discussions or talks in that regard?

We are particularly interested in hearing the ambassador's view on the Irish Parliament's call for the North to be given special status within the European Union. We believe a special status would ensure that the four freedoms are protected on the island.

Another headline in the ambassador's statement was a safe and secure Europe. Earlier my colleague mentioned our concerns. I note that the Estonian priority includes an increase in defence expenditure. Earlier I mentioned to the Minister of State the proposal to spend €1.5 billion on developing European defence co-operation and the EU-NATO partnership. My party does not support the measure. I am sure the ambassador is aware that Ireland is a neutral country. Perhaps it is not as neutral as my party and possibly many people in this country would like it to be. Successive Irish Governments have eroded our neutrality over the years. People believe that many of the steps that we have taken within the European Union has eroded our neutrality. I oppose the militarisation of Europe. I oppose a military alliance and the creation of an EU standing army. Can the ambassador convey her Government's view about the creation of an EU standing army? Does her country support or oppose it? Does she think an EU standing army is a necessity? Is Estonia happy with NATO? Does Estonia believe NATO meet its needs? Does the ambassador agree that military expenditure should be a national issue rather than an EU one? I believe military expenditure should come from national budgets rather than EU ones.

I am conscious that many people in Europe have survived difficult hardships. Many of us would like the EU to prioritise investment in health care, education, jobs and ways to improve the quality of people's lives. Therefore, many of us oppose investment to make Europe a fortress.

Earlier the Minister of State talked about Europe being involved in peacekeeping. Is Europe involved in peace enforcement? There is a huge difference between peacekeeping and peace enforcement.

In terms of digital Europe and the free movement of data, Estonia places a high priority on technology and the technological industry. Many people view Estonia as leading this sector in the EU. In fact, I have been told that the only thing that an Estonian citizen cannot do online is get married, divorced or sell one's home. Estonia is way ahead of us in technological terms and voting is an example.

H.E. Mrs Kristi Karelsohn:

That is true.

Photo of Seán CroweSeán Crowe (Dublin South West, Sinn Fein)
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The Estonian diaspora can avail of voting technology.

An EU regulation adopted in 2015 says that Internet service providers cannot discriminate between content and it is called net neutrality. It means that the provider cannot give faster access to video streaming than Dailymotion on YouTube, for example. I presume YouTube would provide this service to its parent company Google. The fine for violating the EU principle of net neutrality is €9,600 in Estonia, which is a fraction of the penalty enshrined in laws in other countries. Why is the fine so low in a progressive country like Estonia? Non-net neutrality can cause damage to both freedom of expression and online competition. I call for the issue to be tackled strongly. Estonia champions net neutrality. How does it enforce fines?

The ambassador mentioned an inclusive and sustainable Europe in her opening statement. This includes modernising rules in order to promote labour mobility and the free movement of persons. What does the Estonian Government mean by that? It sounds positive but it could mean the weakening of workers' rights.

I welcome the fact that Estonia seeks to secure a more sustainable environment. Climate change is one of the biggest threats to face the planet. I hope that the Estonian Presidency will champion green and environmentally friendly initiatives. Can the ambassador give me more details on the matter?

Earlier my colleague touched on the opening up of markets. It is a positive that people can travel from Dublin to Estonia yet retain the ability to use the same data provider. Let me outline one of the negatives of being a small country like Ireland. This morning I heard a radio clip about the availability of cancer drugs. Small countries like Ireland are squeezed out of the market when it comes to any type of medicinal drugs. Does the ambassador believe Europe should work together to get a better package particularly for highly expensive life-changing drugs? The companies that produce these drugs can cut off small counties. Does the ambassador view such co-operation in Europe as important in the future?

The ambassador touched on the subject of migration. She outlined that Estonia's main priority is to reform the European common asylum system. I agree with her that it should be reformed. As I said to the Minister of State, it should be based on solidarity. We must place the needs of the vulnerable refugees at the heart of the system. Some countries in eastern Europe have refused the mandatory refugee quota. All sorts of reasons have been given but their stance is extremely unhelpful. I am conscious that many of those countries, through their arms industry, have played a role in the conflicts that have erupted in the Middle East and elsewhere. Those countries get jobs from the industry but they have helped to create killing fields where people have died. How does Estonia propose to reform the European common asylum system?

Previous speakers have mentioned the disconnect between EU institutions and many people across Europe. Does Estonia see this matter as a priority? I am interested in hearing Estonia's approach and policies to tackle the problem that it will adopt during its Presidency. One can see from recent elections that people have turned away from the idea of Europe, which is worrying. There is a lot wrong with Europe but, conversely, there is many positives. We all agree that we need to do things differently and better. The European ideal of solidarity and people working together for the betterment of Europe and the entire world is the type of vision and image that we need to promote.

Photo of Seán HaugheySeán Haughey (Dublin Bay North, Fianna Fail)
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I welcome the ambassador here this evening. I thank her for outlining the priorities of the Estonian Presidency, which are very realistic, achievable and will prove beneficial to the European Union as a whole.

I note the new Franco-German dynamic at the heart of Europe with the election of President Macron in France. There is a dynamic for a multi-speed Europe and maybe further integration. It is important that small nation states work together in the debate. I know that we can do that with Estonia as we come to terms and develop new policies on the future of Europe.

Brexit will affect Ireland more than any other country in the EU. I want the ambassador to assure us that her Government is aware of the problems that we are facing. We may call on Estonia's support, at some stage in the future, as negotiations conclude in terms of the particular difficulties that affect Ireland.

In terms of the future of Europe, we have had the Brexit referendum, the election of Donal Trump and there has been a rise in protectionism around the world.

How does support currently stand in Estonia for the European Union and for NATO? The trend towards populism, protectionism and anti-globalisation is being reversed in the wake of these recent shocks. Where does Estonia stand with regard to that trend? Is there wholehearted support for the European Union project?

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry, Independent)
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I call on Her Excellency to respond to the issues raised.

H.E. Mrs Kristi Karelsohn:

I thank the members for their comments and questions. I will try to address them in categories. I will start with the final question about support for the EU in Estonia. This question followed on from some previous questions and comments. Since joining the EU, and indeed prior to that, Estonia has ranked among the countries with the highest levels of EU support, if not indeed the highest. Support for NATO, meanwhile, is higher still. Why is support for the EU so high in Estonia? This may also answer some of the other questions raised by members. Estonia is three times smaller than Ireland. It is very clear to us how much we stand to gain both from working together with European allies and particularly from the Single Market and the opportunities it opens to our companies to export to Europe. These factors drive how we think about Europe. They also drive our priorities and what it is that we want to achieve with this EU Presidency. We are working on efficiency, not only in terms of the digital agenda but also with regard to some of the other matters raised here today, the movement of drugs, for example. It is vital for a small country and a small market to co-operate with others so as to maximise gain.

I now come to the issue of Brexit. As was already mentioned, responsibility here lies with the Commission. We want to keep the whole process around the negotiations under the Commission's lead, with discussions taking place in the General Affairs Council and in the dedicated working groups. The Estonian Government is, of course, very well-informed about Ireland's special concerns in this matter, particularly with regard to Northern Ireland. I can confirm that I, for my part, have done everything I can to keep my government informed. I do not, however, think it wise for the Presidency to start any separate negotiations or engagements with Britain. In our Presidency of the EU we do of course have a responsibility for the interests of member states, so we will engage very closely with the Irish Government in the future so as to understand its interests and concerns.

With regard to digital and data protection, a question arose about fines and net neutrality. I am certainly aware that Estonia has some of the lowest fines in the Union. This, however, remains the responsibility of individual member states. I have just seen official confirmation from Estonia that it is intended to keep the fines as they are. If we decide that they need to be changed then we will do so.

On the issue of defence co-operation, I am very aware of Irish neutrality and the special concerns it raises for Ireland. The committee must also understand, however, that we in Estonia are in a very different situation. We see no need for an overlap in EU and NATO defence responsibilities. Both organisations have their own defined responsibilities and files in this regard. The EU could duplicate what NATO is doing, but we are certainly not pushing that EU member states be required to dedicate the same 2% expenditure levels that NATO members currently do. The EU is a totally different organisation. We do, however, see a need for strategic co-operation to complement each other's capabilities and competencies. We see this, as I mentioned earlier, in the area of cyber security, where the two organisations could and should work together. Other hybrid threats such as terrorism are not of a purely military nature and thus not solely relevant to NATO.

The crucial point with regard to migration is that we find a way to distinguish between different categories of migrant. We need to work with those entitled to international protection. I definitely agree that we need solidarity between EU countries on this and the Estonian Presidency will very much focus on getting this solidarity working. We also have to find ways of tackling the often illegal in-flow of economic migrants.

I am not sure if I have left anything out-----

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry, Independent)
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I think Her Excellency has covered everything. On behalf of the committee, I thank her for her involvement and co-operation with us to date. I have always enjoyed our meetings with her in the past. I thank her for coming here today and on behalf of the committee I wish Estonia well with the Presidency. I also personally wish the ambassador the best of luck in the important coming months for her and for her government as they take control of the steering wheel on all of our behalf. We are very grateful for the ambassador's work.

We will now go into private session.

The joint committee went into private session at 4.10 p.m. and adjourned at 4.20 p.m. sine die.