Eamon Gilmore (Dún Laoghaire, Labour)

This was a summit that had much work to do. The planned agenda included initial work on EU2020 - the replacement for the Lisbon Agenda - the post-Copenhagen negotiations, and Haiti. It was right that the focus of the summit should have been the economy. With 23 million Europeans unemployed and given the failure of the Lisbon Agenda, the EU2020 agenda is a vital part of the future agenda for the Union. Unfortunately, however, the summit was dominated by the public finances of Greece and the implications of the Greek position for the eurozone. Regrettably, the vital discussion on EU2020 was pushed to the background.

Several points are worth making about the approach taken by the summit to the Greek situation. First, it was right for the leaders to recognise that this is first and foremost a problem for Greece and that it can only be solved in Greece. The new Government there has made clear its determination to confront the country's deficit and it is appropriate that it be given the opportunity to do so. The PASOK Government under the Prime Minister, Mr. Papandreou, has repeatedly stressed its intention to take radical measures to address the public finances. It deserves the support of the other eurozone countries in its efforts. Equally, it was important that the eurozone countries issue a strong statement of solidarity and support making clear that the eurozone is willing to backstop the Greek position while it implements its adjustment programme. There are many who would have preferred to see more concrete proposals coming from the summit meeting rather than kicking the details off to ECOFIN. What is important now, however, is that both sides stick to their commitments, the Greek Government to its adjustment programme and the eurozone to its solidarity commitment.

The debate about the Greek position has been accompanied by an enormous amount of ill-informed commentary. Numerous commentators have referred casually to the end of the euro or the break-up of the eurozone as though that were a practical proposition. It is not. Nor is it a practical idea that any individual country could depart from the zone without enormous economic and social consequences. This kind of simplistic commentary does nothing to deal with the problem. As a result of the summit statement, the implicit guarantees that were part of monetary union have become more explicit, but they have not become all that much clearer. In future, a more explicit crisis-resolution mechanism will be required.

In the meantime, while fiscal consolidation is necessary in some eurozone countries, it is not good policy for all countries aggressively to curtail their deficits just yet. For Ireland, the counterpart of fiscal consolidation must be a revival in exports which depends on robust demand in our main markets, including the United Kingdom and Germany. As several commentators have pointed out in recent days, the unwillingness of Germany to boost demand for exports from other eurozone countries has direct implications for countries like Ireland that need to make fiscal adjustments. The debate needs to move on to these types of issues.

Another feature of the period running into the summit and of the whole controversy surrounding Greece has been the role played by credit default swaps, CDSs. If trading in CDSs can be used to undermine the stability of a country - and, by extension, the eurozone itself - then there is a logical course of action for governments to take. The market in CDSs for sovereign debt must be curtailed. The British economist, Will Hutton, has pointed out that England banned trading insurance policies in which nobody took responsibility for paying insurance as "the worst form of financial depravity" in the 18th century. While hedge funds may love CDSs, they have played a major role in undermining confidence in Greece. Mr. Hutton calls for a ban on CDSs in their current form.

The whole area of hedge fund regulation is one where the European Union needs to adopt a more robust stance. There is a proposal for a directive on alternative investment fund managers, which was proposed by the European Commission in April 2009. Regrettably, this proposal falls far short of the type of robust legislation that must be imposed on hedge funds. It proposes to regulate hedge fund managers rather than the funds themselves. It does not impose clear limits on extreme leverage and does not impose adequate or clear penalties for improper conduct. Europe must learn the lessons of the crisis and bring forward effective measures to rein in financial markets. Proper hedge fund regulation is a crucial part of that process.

While it is understandable that the situation in Greece pushed other issues down the agenda, it is nonetheless regrettable. The EU2020 strategy must be addressed with greater urgency. With 23 million Europeans unemployed, the European Union must come forward with a viable strategy for long-term growth and the generation of more and better jobs. The last strategy that set out to achieve this goal, the Lisbon Agenda, is increasingly seen as having failed. This issue must be made a priority for future summits.

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