Martin Mansergh (Tipperary South, Fianna Fail)

The Taoiseach's earlier remarks on the outcome of the informal meeting of the European Council were comprehensive, clear, informative and important. It is, therefore, worth stressing the two core messages that he identified in the statement by the Heads of State or Government of the European Union on 11 February. The first of these is the clear solidarity that exists among the member states. The second is that all member states recognise that they have commitments and responsibilities which they must fulfil, particularly as regards the framework provided by the Stability and Growth Pact. This statement by the Heads of State and Government provided a clear defence of, and support for, the integrity and cohesion of the eurozone against a background of the recent global economic and financial crisis.

The Heads of State and Government fully supported the efforts of the Greek Government and its commitment to do whatever is necessary, including adopting additional measures to ensure that the ambitious targets set in the stability programme for this year and thereafter are met. They also called 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. It is also important to draw attention to another aspect of the statement namely, that "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". The position taken on Greece implicitly reminds all concerned that the Stability and Growth Pact, and adherence to its rules, continue to provide an essential framework for sound budgetary policies and that there has to be a continued firm commitment to the pact in these difficult times.

This is of particular relevance to Ireland and highlights the need to continue with the policies to stabilise the public finances that are already in place. The 2010 budget was the latest in a series of measures, beginning in mid-2008, designed to restore order to the public finances. The budget re-emphasised the Government's commitment in this regard. Difficult and painful measures were necessary in the 2010 budget. An expenditure adjustment of €4 billion was delivered. As a result of these decisive actions, it is forecast that the deficit will be stabilised in 2010. The Exchequer returns for the end of January 2010 were broadly in line with expectations. Much more needs to be done to improve our public finances and we have set out commitments in this regard up to the end of 2014. While the Government is not complacent about the numerous challenges that still confront us, including the expectation that economic activity will contract again this year, there are indications that the economy is stabilising and there are emerging signs that we may be close to the bottom of the current downturn. There is growing consensus among observers that positive economic growth will now return during the second half of this year, although we will have to wait until next year before we experience growth on a full-year basis, as the international recovery gains momentum, competitiveness improves and the domestic economy recovers.

Following the direction given by the informal council last week, the ECOFIN Council adopted a comprehensive and ambitious package of recommendations to Greece, covering fiscal and structural policies, based on proposals from the European Commission and following discussion with all member states. These recommendations require that the Greek authorities take steps to reduce the deficit on the public finances below 3% of GDP by 2012, in line with their obligations under the Stability and Growth Pact. They are also invited to implement specific economic reforms considered consistent with the smooth functioning of the eurozone.

With regard to Ireland's response to the Greek situation, we welcome the efforts of the Greek Government to tackle the substantial economic and fiscal challenges which the country faces. These measures are key to addressing the fiscal and competitiveness challenges of the Greek economy. We also welcome recently announced measures which clearly show the determination of the Greek Government to consolidate the public finances and restore competitiveness. There is an urgent need for these measures to be implemented in a credible manner.

We are very supportive of the Greek Government in its plans to deal with a difficult economic and fiscal situation. This is primarily in the interest of Greek citizens, but also in the common interest of all eurozone countries and the entire EU. We are confident that the necessary measures will be implemented speedily and efficiently, and that the Greek authorities will succeed in overcoming the fiscal and macro-economic challenges they face.

Another important topic discussed at the European Council was the planned successor to the Lisbon strategy for growth and jobs - EU 2020, as it is currently called. The Lisbon strategy for growth and jobs, which has been in place since 2000, is due to expire this year. It encouraged member states to engage in a programme of wide-ranging structural reforms to enhance the growth potential of the EU economy. Before the global economic and financial crisis, the strategy had helped create more than 18 million jobs within the EU.

The Taoiseach's comments clearly outline the importance of this proposed strategy to deliver medium-term and long-term structural change in Europe. As he has highlighted, the reforms that this new strategy will involve are necessary to allow us to deal with many serious challenges. These include those being thrown up by demography and how to sustain the European social model, including pensions. There are also challenges of how to compete on a global level when many countries or regions continue to grow rapidly as we struggle, and the related environmental and energy challenges. The details of this new strategy will not be presented by the Commission until 3 March and will not be finalised until June. I am quite sure about thing, however: the new strategy will not support a "business as usual" approach to structural reform.

Deciding on new policy priorities and structural changes will not, of itself, achieve results. Those policies and reforms must be implemented, in an effective and verifiable manner across the Union. This will be done through a reform agenda and framework which will ensure that it is pursued at EU, eurozone, member state and, where appropriate, regional levels.

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