Michael Noonan (Limerick City, Fine Gael)

In recognition of institutional shortcomings, several important governance improvements were endorsed last week. There are many dimensions to this including the following arrangements: Heads of State or Government of the euro area will meet at least twice a year in euro summits to strengthen euro area governance and ensure closer integration; there will be a president of the euro summit; the EU Commissioner for economic and financial affairs has been given additional functions; and, various changes at official level to improve matters are envisaged. In addition, the President of the European Council has been given a mandate to identify possible steps to strengthen the economic union, including exploring the possibility of limited treaty changes. An interim report will be presented in December 2011 and a final report by next March. Our view is that governance reform is absolutely necessary because there is no point in addressing the symptoms without addressing the underlying root causes. In other words, the Government's view is that every appropriate step should be taken to avoid a recurrence of the difficulties confronting us. We are supportive of enhanced economic governance within the euro area. The lesson from the current predicament is simple - being part of a monetary union requires effective co-ordination and surveillance of monetary and fiscal policies and this can only be achieved through an adequate and balanced system of governance.

With regard to further economic integration within the euro area, we look forward to considering the interim report on strengthening the economic union within the euro area that President Van Rompuy will present in December 2011. We welcome the proposals from the Commission to strengthen the role of the Commissioner for economic and financial affairs as well. It is important to recognise that a series of significant measures are already in place including the European semester, which is proving its worth by ensuring a co-ordinated, flexible and effective system of budgetary planning at member state and EU level. In addition, a series of legislative reforms to improve economic governance has been agreed and will be implemented as soon as possible.

I outline some of the main guiding principles regarding our approach to the governance debate as it moves to the next stage. Ireland is firmly in favour of improved, balanced governance that offers correct safeguards. We believe this is in all our interests. The urgency of the current situation demands prioritisation of value-added measures that will be implemented quickly and preferably within the existing treaty. We must see and then assess any proposals that may require treaty change. We propose that institutional balance must be maintained, avoiding excessive use of intergovernmental methods where possible and respecting the role and expertise of the European Commission.

I have outlined the comprehensive strategy to address the euro area sovereign debt crisis which, if fully implemented, will put the euro area back on the right path. However, the announcement by the Greek authorities that the adjustment programme is to be put to a referendum has put a spanner in the works and has contributed in no small part to renewed market turbulence. This is unfortunate and has added to uncertainty in the euro area. Obviously, it is in all our interests to minimise this uncertainty and to enhance confidence with regard to the euro area. Therefore, the sooner clarity is restored, the better for us all. Ireland is doing its part to resolve the euro area crisis. The fourth quarterly review by the troika was successfully completed recently. The mission has concluded that the programme is on track and our funding partners are firmly of the view that Ireland continues to make tangible progress in all the key areas.

Market sentiment towards Ireland has improved, with a clear decoupling from other programme countries evident since the summer. While sentiment is not yet consistent with a return to market-based funding, we are moving in the right direction. Of course, we cannot and will not be complacent. I want to assure the House that the Government will continue to act appropriately and decisively. Ireland will continue to deliver on its programme and work our way back to the markets, and we are making real headway.

The summit last week represents a major step forward for Europe and for the euro area in particular. The adoption of a comprehensive package to tackle the crisis is an important development. While many details remain to be ironed out, we are on the right track. It will still be a bumpy ride ahead, as we have seen in recent days, but we must remain confident and continue on the right path.

As I mentioned, the EU and the euro area in particular have come a very long way over the past year or so. The decisions of the Heads of State and Government on 26 October were another key step forward in that process. We now need to ensure that we implement these decisions as soon as possible and continue to act together to tackle the crisis facing the euro area. As has been said on a number of occasions, the euro area member states will act to restore confidence and do whatever is necessary to protect financial stability in the euro area. The decisions of 26 October must be seen in that context. I look forward to the contributions of Deputies.

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