Brian Cowen (Laois-Offaly, Fianna Fail)

I thank the Deputies.

As Members will be aware, the European Council met in Brussels on 16 and 17 December 2010. This was its sixth full meeting in 2010 and an additional meeting of Heads of State or Government of the eurozone also was held in May. This unusually high number of meetings reflects the unprecedented economic events which confronted the Union last year. Economic matters were also very much to the fore in December.

At its previous meeting in October, the European Council endorsed the report of the task force on economic governance that undertook its work under the stewardship of the President of the European Council, Herman Van Rompuy. Further to that report and to ensure balanced and sustainable growth, the Council also agreed on the need for member states to establish a permanent crisis mechanism to safeguard the financial stability of the euro area as a whole. This permanent mechanism would come into effect in 2013, replacing the temporary, three-year arrangements put in place in 2010. We also invited President Van Rompuy to undertake consultations on a limited treaty change required to that effect. At that time, we agreed to return to the matter at our December meeting.

Following the October meeting, consultations were held with all member states, both on the question of a treaty amendment and on the general features of a permanent crisis mechanism. On 28 November, the euro group agreed on the key features for a European stability mechanism and issued a statement to this effect. On 10 December, President Van Rompuy reported on his consultations, noting that all delegations agreed that the mechanism should be established by the member states whose currency is the euro. All member states whose currency is the euro should take part and those whose currency is not the euro might decide to participate in operations conducted by the mechanism on an ad hoc basis. President Van Rompuy reported that all delegations had confirmed their readiness to consider limited changes to the treaty to that end and that all were agreed that the amendment should be brought about through use of the simplified revision procedure provided for in Article 48.6 of the Treaty on European Union. This is the procedure that applies when a proposed amendment concerns a policy area and when it would not result in an increase in the Union's competences.

At our meeting in December, the European Council welcomed this report. We agreed that the treaty should be amended to provide for the permanent mechanism, to be called the European stability mechanism, to replace the temporary arrangements established last year. We also agreed on the draft text for the necessary amendment to be adopted under Article 48.6. This article requires that a number of institutions, including the European Parliament and the Commission, be consulted prior to the adoption of a decision to amend the treaty by the European Council.

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