Enda Kenny (Mayo, Fine Gael)

I propose to take Questions Nos. 17 to 41, inclusive, together.

I attended the European Council in Brussels on 8 and 9 December. As I will be making a statement to the House tomorrow, I will confine myself to some brief remarks about the meetings.

Discussions at the Council were dominated by the overall economic circumstances in Europe with a particular view to overcoming the crisis currently facing the euro area, including President Van Rompuy's interim report on strengthened economic governance in the euro area, including the possibility of limited treaty change. We made important progress, both on firewalls and budget discipline, two key elements of the package for Ireland that I had highlighted ahead of the meeting. We agreed to bring forward the entry into force of the European Stability Mechanism, ESM, to July 2012 and to reassess the overall ceiling of the EFSF and ESM of €500 billion in March 2012.

The Council agreed that the requirement for private sector involvement, PSI, be removed from the draft ESM treaty. This was one of the specific issues I raised with President Van Rompuy and Chancellor Merkel in advance of last week's meeting, and I am pleased that it has now been agreed. This is very good news for countries such as Ireland, which are trying to get back to the financial markets at as early a stage as possible.

To further increase the economic firepower available, euro area member states are to consider, and confirm within ten days, that they will provide up to €200 billion in bilateral loans to the IMF. We are also looking forward to contributions from the international community.

While the question of the ECB's mandate did not arise, I very much welcome its recent decision to make unlimited three-year loans to Europe's banks at low interest rates. This should have a real impact in moving us beyond the current crisis phase.

On economic governance, we reached a political agreement to strengthen our rules to ensure greater stability in the eurozone, building on the Stability and Growth Pact. Euro area member states are now committed, as a rule, not to run structural deficits above 0.5% of GDP, and will write such a provision into their national laws. A member state in breach, in partnership with the Commission, will have to engage in a process to get back on track within a given timeframe. The significant progress being made by Ireland through implementation of its programme was again recognised by partners.

In my contribution, I set out for colleagues the uniquely onerous burden the Irish people are carrying as a result of the steps we have taken to recapitalise our banks. Specifically, I asked at the Council meeting that facilities that now exist – for example, through the EFSF – be made available to assist in making this burden more manageable. Colleagues gave me a receptive hearing and, together with the Minister for Finance, I will be pursuing the issue in the period ahead. I am confident we will be able to make positive progress in a way that makes a real difference for Ireland.

What we achieved last week was a political agreement. Work will now be taken forward on how to give it legal effect. I am, of course, disappointed that it did not prove possible to reach agreement on a way forward for all 27 parties. I regret that certain member states will be outside the new arrangements and that we must now proceed by way of an intergovernmental treaty outside the EU treaties.

There is a great deal of complex legal and technical detail to be filled out by March, when we will return to the matter. We will study the legal implications of what has been agreed very carefully, including whether a referendum will be necessary in Ireland. For now, it is simply too soon to say. However, the House can be assured we will do whatever is required to ensure that Ireland can ratify the new agreement.

For the reassurance of the House, I can confirm that last week's political agreement does not include any provision on corporation tax. The position in that regard and the Government's firm position remain unchanged.

The European Council tracked progress under the Euro Plus Pact in which 23 member states, including Ireland, participate. The meeting also followed-up on the issue of energy, last discussed by the European Council in February of this year. In addition, enlargement issues featured, and the signature of the Croatian accession treaty took place in the margins of the meeting. The European Council also agreed conclusions on Iran, Syria and Afghanistan.

I have on several occasions outlined for the House how these meetings are prepared. President Van Rompuy circulates the proposed agenda and draft conclusions are prepared. These are generally discussed in several fora, both political and official, ahead of the meeting proper, and Ireland engages very actively as part of the process, sometimes orally at meetings and sometimes by way of written comments circulated to all member states. Ireland is well represented at these preparatory meetings and our views are known and understood.

In addition, ahead of last week's meeting I wrote to President Van Rompuy to outline a number of concerns for this country. I developed those points during my interventions at the European Council meeting. I also spoke to him and to the UK Prime Minister, Mr. Cameron, prior to leaving for Brussels. As the House will be aware, I also met Chancellor Merkel on 16 November, ahead of last week's meeting. I also ensured that the President of the Commission, Mr. Barroso, was fully briefed.

With regard to my future travel plans, I will attend the European Council meetings in March, June, October and December of next year and any other meetings arranged in the interim. Work is ongoing between my officials and those of French President Sarkozy to arrange a mutually convenient date on which to meet in the new year.

I had an opportunity to meet the Prime Minister-elect of Spain, Mariano Rajoy, at the EPP meeting which took place last week in Marseilles ahead of the European Council. I congratulated him on his election and indicated that I look forward to working with him in the future. On the basis of substantive business interests, I will also evaluate carefully the need for any further travel plans as we begin our work in 2012.

Finally, Iceland is not a member of the euro or the European Union and, therefore, its economic situation did not arise at the recent meeting.

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