Brian Cowen (Laois-Offaly, Fianna Fail)

The informal meeting of the European Council on Thursday, 11 February was the first meeting presided over by the new President of the European Council, Herman Van Rompuy, under the new Lisbon treaty arrangements. It was also the first meeting since the appointment of the new Barroso-led European Commission, which includes Mrs. Máire Geoghegan-Quinn as Commissioner for the important portfolio of research, science and innovation.

I wish to pay a personal tribute to Charlie McCreevy who served as Commissioner for the past five years. As Commissioner for the Internal Market, he had responsibility for the financial services sector in Europe, which has been top of both the European and the global political agenda for the past three years given the turbulence in the international financial markets. He dealt with this portfolio in a politically sensitive and deeply committed way, including supporting a series of measures which are helping to ensure the economy of the European Union recovers. He is a highly respected politician on the international stage.

While the European Council forum is formally scheduled to meet four times a year, there can also be informal or special meetings which are more ad hoc in nature and do not usually have formally agreed conclusions. On this occasion, there was a formal outcome, namely, the statement of the Heads of State or Government on Greece. One consequence of the entry into force of the Lisbon treaty is that the European Council has a more prominent role in deciding and driving the overall direction of the Union and its policies. That said, I expect sectorial Councils will continue to have a major role in shaping the policy agenda.

Our meeting on 11 February was called by the President of the European Council to discuss the future economic policy of the Union. It was also to give direction to work to be taken on in various Council formations ahead of the spring European Council which normally concentrates on economic matters. This year's spring Council will be on 25 and 26 March. It had also been intended that we would discuss the aftermath of the December climate change conference in Copenhagen and the crisis in Haiti. In the end, however, we did not have in-depth exchanges on these subjects.

Instead, the challenges facing the Greek Government to meet the targets set in the 2010 stability programme and beyond took up a significant part of our meeting. A statement was agreed on this matter which, for completeness, I will now read into the Official Report:

All euro area members must conduct sound national policies in line with the agreed rules. They have a shared responsibility for the economic and financial stability in the area.

In this context, we fully support the efforts of the Greek Government and their commitment to do whatever is necessary, including adopting additional measures to ensure that the ambitious targets set in the stability programme for 2010 and the following years are met. We call on the Greek Government to implement all these measures in a rigorous and determined manner to effectively reduce the budgetary deficit by 4% in 2010.

We invite the ECOFIN Council to adopt at its meeting of 16 February the recommendations to Greece based on the Commission's proposal and the additional measures Greece has announced.

The Commission will closely monitor the implementation of the recommendations in liaison with the ECB and will propose needed additional measures, drawing on the expertise of the IMF. A first assessment will be done in March.

The Euro area member states will take determined and co-ordinated action, if needed, to safeguard financial stability in the euro area as a whole. The Greek Government has not requested any financial support.

Two core messages are contained in the statement. First, there is clear solidarity among the member states. Second, the member states acknowledge they have commitments and responsibilities which they must fulfil, most notably under the framework provided by the Stability and Growth Pact.

There are various agreed mechanisms to support member states in doing that. Since the European Council met on 11 February, ECOFIN met again last week and agreed that the Commission would report back to ECOFIN on 16 March on the implementation of budgetary measures by Greece. ECOFIN also agreed that additional measures would be taken, if considered necessary, to secure the budgetary target of a reduction of 4% of Greece's budget deficit in 2010.

It is important to acknowledge the scale of the adjustment which the Greek Government has undertaken to make. It is a very considerable, but a necessary, undertaking. We are supportive of Greece not just because we are friendly nations, partners in the European Union and members of a single currency, but also because we have the common interest of the euro area as a whole to protect. Greece's difficulties have been compounded by a lack of trust in the statistics it provided previously. The sharply increased degree of scrutiny now being applied is thus in the interest of both Greece and the euro area as a whole.

The other main topic of discussion was economic policy and the need for a new European strategy for growth and jobs. One important element concerns the means and timing of exit from current exceptional stimulus arrangements across the Union. Perhaps even more important is the degree to which we can reach and deliver agreement on medium to long-term structural change in Europe. Such change is necessary to allow us to deal with the challenges being thrown up by our demography, the sustainability of the European social model and pensions, the challenge of competing on a global level when many countries or regions continue to grow rapidly as we struggle, and the related environmental and energy challenges. New policy priorities will not, of themselves, achieve results; they must be implemented in an effective and verifiable manner across the Union. The mechanism for turning agreed policy into action is to be a new strategy for growth and jobs, succeeding the Lisbon strategy that ran from 2000 to 2010 but which, in recent times, has been somewhat overshadowed by the economic crisis.

The aim is for this new strategy to be considered in detail at the spring European Council and agreed at our June meeting. As a next step, the Commission is due to present a communication on the proposed strategy in early March, taking into account the key elements of our discussions to date. At the meeting on 11 February, President Barroso gave a presentation on the broader economic context. The decline in European GDP has been the worst since the 1930s. The result is 7 million more people unemployed than before the crisis, more than every man, woman and child on this island. Looking to the future, and the nature of the challenge facing us, the Commission estimates that 16 million more jobs than today will require a high level of qualification but there will be less demand for what is sometimes termed low-skilled work.

These are stark figures and they illustrate the scale of the economic crisis across Europe. The challenges we face today are by no means unique to Ireland. Right across Europe, not to mention further afield, governments are facing major challenges and are confronted with tough decisions as they seek to reduce budget deficits, to stem the haemorrhage of jobs, to re-stimulate their economies and to remedy their banking sectors. This is why, at EU level, we now need a new, targeted strategy to promote growth, create jobs and ensure competitiveness. The Commission has suggested the core elements of that strategy should be based on knowledge and innovation, an inclusive high employment society, and greener growth. These elements resonate very well with our own national efforts and priorities, including our smart economy plans and framework.

During our meeting, we also discussed how we can ensure that the agreed strategy is effective in delivering on its goals. We need to ensure shared responsibility and coherent action, while maintaining sufficient flexibility so that responses can reflect varying challenges and differing national circumstances. We also discussed how the various budgetary, economic and indeed climate change plans could be presented and considered in a more coherent way, considering they are closely related to each other. We agreed on the need for enhanced monitoring, benchmarking and reporting, where the progress of each member state is held up to greater scrutiny by the others. These arrangements must also be proportionate and not over-burdensome if they are to be both efficient and effective.

There was widespread agreement that the new strategy should be focused on a relatively small number of key strategic priorities. For my part, I stressed that the strategy must focus on areas such as competitiveness; research, science and innovation; completion of the Single Market; employment activation measures and training; a low carbon green technology economy; sustainable use of resources, including the development of agriculture and food resources; and boosting our access to global markets. Others of course will have their own priorities for which they can be expected to press.

The Union is at an interesting point. There is a shared desire to improve our economic performance so that we can deliver for our citizens. Working more closely with one another can play an important role in pursuing that. At the same time, the current difficulties have highlighted that we must all act within agreed frameworks that protect our common interest and our national interests. In the coming weeks and months, I will be endeavouring to ensure the priorities that are important to Ireland are taken on board as we craft a framework to guide the Union's economic direction in the coming decade.

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