Enda Kenny (Mayo, Fine Gael)

Last December, depending on whom one spoke to, the European Union summit was predicted to be a blame game or a waiting game. As politicians, we have become used to summits teetering on the brink of collapse before last minute adjustments. However, for months before the December summit, in fact since the failure at Luxembourg, for many politicians and commentators collapse seemed inevitable. The only uncertainty seemed to be whether Britain or France would be to blame. Anglo-French tensions simmered since the Iraq war. The British Prime Minister, Mr. Blair, was tough in demanding reform. President Chirac's pre-summit warning was ominous when he said, "Britain has a difficult mission".

In the end, through a last-ditch compromise by Mr. Blair and Chancellor Merkel's becoming mediator, a surprise agreement was achieved, even if attempts to finalise the financial perspectives, better known as the budget, were tedious and tension filled. However, it was never going to be easy to thrash out an agreeable deal to pay for enlargement while at the same time mourning the defeat of the constitution.

I commend the role played by my EPP colleague, Chancellor Angela Merkel. While after 30 hours of marathon negotiations, Britain was ready to compromise, in the end, her role as honest broker sealed the deal. It was expected that she would have a defining role in the process. As the newly appointed and very influential leader of one of the strongest countries in Europe and in the world, her intervention was important.

As the Taoiseach outlined, the budget talks revealed several underlying tensions, not least with the British Prime Minister's initial plans regarding the reduction of the British discount in exchange for cuts in EU farm subsidies being correctly bitterly resisted by France and the new member states from eastern Europe. With a view pertaining that a Union that could not manage to agree its budget would not have much of a chance of agreeing on anything else, it was critical that we reached consensus on this matter. Agreeing the medium-term budget for the Union has sent out a positive signal and not before time. It sent out the message that after months of gridlock and angst after the "No" vote in founder-member states, Europe can agree and can take action.

Negotiations on the budget for 2007-13 were launched during Ireland's Presidency of the EU in 2004. The budget, at more than €862 billion, will be limited to 1.045% of EU economic output or Union gross national income over the seven years under headings such as cohesion, with €307 billion; CAP direct payments and market support, with €293 billion; and rural development, with €70 billion. The initially contentious British rebate will be reduced by €10.5 billion in CAP payments while the Government here estimates that Ireland will receive €10 billion in CAP payments over the same seven-year period. There will be rural development funding of €1.9 billion. That is a significant figure and the money should not be wasted. Some visionary planning on how it is to be spent is required.

I repeat my earlier statements that the Government should not agree any premature review of the CAP. Irish farmers have engaged in a serious review of the CAP already and payments have been reduced. The current level of CAP support should continue to 2013 as agreed. Any moves to reduce CAP payments before that time should be strenuously resisted. I am glad the Taoiseach referred to a Commission direction in writing on that matter. If we want to maintain and expand public support for the European Union, such agreements must be honoured.

In 2008 and 2009, a review of spending on all aspects of the EU budget will take place. However, the outcome of that review will not take effect until 2013 unless the European Council, acting unanimously, decides otherwise. However, while we are pleased with our budget compromise that established a financial framework for the Union for the medium term, we should remember that this compromise does not yet represent a major breakthrough in efforts to establish sustainable budget structures in the longer term. In many ways, our compromise maintains the existing spending structures, with their focus, for now, on agricultural spending. However, at the same time, crucially, we are making a start on the reform of the future structures of spending — the accountability factor of which should help bring Europe closer to the people — with greater priority being given, in future, to spending on innovation and promoting growth.

Right now, our budget is relatively small at approximately 1% of gross national income. To restore competitiveness against others on the Continent, we need to concentrate on making the best use of it in the longer term, not just in agriculture but also in innovation, education and research.

I visited the Tyndall Institute in UCC last week. The Taoiseach may also have had occasion to do so. It is fascinating to hear how academics and researchers plot out the future for the next ten to 15 years, be it in the area of silicon development, semiconductors, mass communications, high speed communication effectiveness or whatever. The development of nanotechnology, what it means and what it can mean in practice, is the way of the future from an innovation perspective. The country can be proud of that type of institute.

We must remember that western Europe currently accounts for 30% of global GDP and Asia, excluding Japan, accounts for just 13%. The next 20 years will see a serious correction or rebalance, where these two will be expected to converge at some point. As the House will be aware, India produces 3 million graduates per year. If Europe is to compete at the high end, we must examine investing in innovation, growth opportunities and, crucially, education. This is recognised in every country and across all parties but giving practical effect to it is the challenge.

While the budget was the major work and outcome of the December summit, discussion was undertaken and some progress made in a number of other key areas, such as the threat of terror and the formulating of a comprehensive and proportionate response. The summit also noted progress in developing both medium and long-term strategies to deal with climate change and the search for sustainable sources of energy. In that context, the recent stand-off between Russia and the Ukraine brought the issue of energy security home to everyone. Gas currently accounts for a quarter of our national energy use but, unlike any other of the vast majority of our EU neighbours, which store on average approximately 14% of their annual requirements, Ireland has no strategic gas reserve. Given that energy is increasingly becoming a matter of global geopolitics, I strongly urge the Government to establish a strategic gas reserve as a matter of urgency.

I encourage the Government to work hard in the establishment of a single energy market in the EU. Currently, there are 25 separate energy markets in the Union, whereas the United States has one. It is time Europe looked to creating a single, stable energy market, which would include harmonisation of pipelines. We may have escaped damage in the recent stand-off in eastern Europe but had it continued for political or other reasons, we would certainly have been affected in time with a loss of competition through higher costs when prices would have risen. This would have been inevitable.

At some of the European debates, there should also be a real focus in terms of where we will proceed in energy and what is the European perspective across all of the borders and countries regarding the existing potential for the development of sustainable energy supply in part, at least, through wind energy.

Also highlighted at the summit was enlargement and its effects. Under our Presidency less than two years ago, the European Union experienced the single greatest enlargement in its history when ten new members joined on 1 May 2004. There is no doubt that this accession has been beneficial to the Union but it has brought a number of challenges to member states, including Ireland. As we discuss enlargement and its consequences, Ireland must always bear in mind that, for generations, our people went overseas to seek a better life for themselves and their families. That is why many people in all walks of life and sectors of the economy — to the highest levels of politics — in the United States have Irish roots.

Ireland has benefited significantly from the arrival of workers from the new EU countries but their arrival has also brought concerns, as highlighted by Deputy Rabbitte, about possible displacement of workers, standards of worker protection and workers' rights. These are concerns and challenges that need rational debate, particularly here. Those challenges and people's consequent sense of unease are primarily due to one issue, namely, lack of planning. By this I mean real planning, namely, planning for the future of the country as opposed to that relating to the short term.

Last year Ireland received 82,000 new immigrants, which is the equivalent of adding the entire population of County Kilkenny in one year. We now have the equivalent, as it were, of 27 counties depending on the hospital services, the classrooms, the buses and the policing and general Garda presence that were already incapable, in many ways and instances, of providing for the needs of 26 counties. It is no wonder people express concerns and anxieties about the effect on our society. They see a squeeze on the services, which is not the migrants' fault. It is the fault of the Government, which failed to plan and provide capacity. By refusing to plan for our new and changed society, the Government has left many people competing for services, most critically in the areas of health, education, transport and so on.

On the future of enlargement, its speed and scope, we are now in a period where the Union could focus on this time of deliberation. Negotiations with Croatia have already begun, while no commencement date for talks with Macedonia has been agreed. With the future accession of Turkey — whenever that happens, perhaps in 20 years' time — for the first time ever the EU will have a border with the Middle East. With public questions over the constitution — a constitution that is good for Ireland and Europe — we would do well to take the time to consider our direction and the speed at which we are proceeding in this matter. Part of that thought must be in devising ways to connect people to the idea of Europe, to communicate to people the "why" of the European Union.

It should be noted that the constitution proposal addressed the residual feelings of many of our citizens that the Union is remote and its decision-making not fully accountable. For example, the constitution proposes that member state parliaments would have six weeks prior notice of any legislation coming from Brussels and, therefore, would have a role in either blocking or adhering to the various measures contained therein. In addition, the Commission would undertake an impact study on its proposals before sending them to the 25 national parliaments for their approval. In these ways, the elected national representatives would have a greater say in the possible impact of European legislation. This is an important measure as it would strengthen the role of national parliaments in the EU's legislative process.

The reforms foreseen in the constitution must be implemented. A number could be introduced now, without treaty change or ratification of the constitution, through inter-institutional agreement or by revising rules of procedure, for example, the transparency of law-making in the Council and more rigorous scrutiny by each national parliament of its government's management of EU affairs.

I welcome the European Commission's decision last week to commit €80 million to the international fund necessary to avert a global pandemic of bird flu. If the global community had acted with alacrity last year, we could have saved ourselves costs and lives, with the list of affected countries being considerably smaller. It is now up to the global community, including the EU, to do its bit to see that desperately poor economies such as Vietnam can tackle the virus in its flocks as effectively as a moderately wealth country, such as Thailand, which has done so with first class surveillance and veterinary services. This can never be achieved by poor countries.

Compared to expectations, the December summit was a relative success and I commend Chancellor Merkel's involvement in that. The Austrian Government has taken over the Presidency andI look forward to debating its proposals withChancellor Schüssel in the months ahead.

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