Enda Kenny (Mayo, Fine Gael)

I thank the Deputies.

Good progress was also made on restoring confidence on Europe's banks through enhancing the quality and quantity of capital available to them and through ensuring their medium term funding so as to safeguard the flow of credit to the real economy. We have first-hand knowledge of how critical it is to get the banking system on to firm ground. That is what we have done through a process of rigorous and credible stress testing, and the consequent necessary capitalisation. Without taking those difficult, but essential, steps earlier this year, we would find ourselves with those issues to face now. The other two elements of the package are agreement on prioritising growth to which I have already referred, and new measures to enhance economic governance, especially, but exclusively, in the eurozone.

Last Sunday, we recognised that we have already done much to strengthen governance since the crisis first broke. The Europe 2020 Strategy has given us a framework to ensure growth-enhancing structural reform. The roll-out of national reform programmes by each of the 27 member states is a vital element of that process. The European semester approach helps to ensure that structural reforms stay on track, including in the Stability and Growth Pact. The euro-plus pact provides us with an improved quality of economic policy co-ordination, and the agreement reached last month of the six new legislative measures, the so-called "six pack" on economic governance allows for a much higher degree of surveillance and co-ordination than we have enjoyed to date, with a view to ensuring sustainable public finances and the avoidance of excessive imbalances. For the way forward, it is important not to underestimate how far we have come.

We recognised also that there is scope to do more to improve fiscal discipline and to deepen economic integration in Europe, particularly within the euro area, not only as an end in itself, but as a further reassurance to the market that once we emerge from the current crisis we have the structures in place necessary to ensure that we never again find ourselves in this position. Ireland has a strong and vested interest in a stable currency and, as I have stated clearly, I support measures to underpin it. We have now agreed that we need to reflect further on how to strengthen economic convergence within the euro area, how to improve fiscal discipline and how to deepen our economic union.

European Council President Van Rompuy, who it has been agreed will also chair euro summit meetings for the remainder of his term, has been requested to prepare a report, which will form the basis for a further European Council discussion in December of this year. President Van Rompuy's work will include an exploration of the possibility of limited treaty change.

I stress to the House that at this point the outcome of deliberations on this issue is by no means predetermined. I continue to believe that there is considerable scope within the existing legal framework, a view that is shared by a large number of partners. However, I would be fooling the House if I did not state that there are others who take a different view and who are strongly of the view that some change, however limited, is required. The case for this will have to be examined carefully over the coming months. I have strongly urged partners that we approach this work from first principles - establishing what we want to achieve and, only then, how we need to go about that.

I should add that a theme running throughout our discussions at the weekend was the need to avoid fragmentation of the Union, especially in creating large gaps between those member states that have the euro as their currency and those that do not. This is an important discussion. Obviously, proposed changes to the way we organise our work must respect that basic requirement. This is reflected in the conclusions adopted on Sunday.

I look forward to representing Ireland at this evening's meetings where my focus will be on securing a comprehensive and credible outcome for Europe, for the euro and for Ireland; and for a deal that protects Irish interest and supports and contributes to our recovery. The stakes are high but I believe that, with the right political will, we can find the necessary agreement and arrive at the appropriate decisions. I look forward to coming back to the House next week to brief it on the outcome of the summit. I thank the Deputies for their indulgence in my running over the time here.

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