Dáil debates

Tuesday, 21 February 2012

3:00 pm

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)

I propose to take Questions Nos. 1 to 30, inclusive, together.

I attended the informal European Council in Brussels on 30 January. As I have already made a statement to the House on the outcome of this meeting, I will confine myself to some brief remarks on its proceedings.

The discussion of growth was a lengthy and important one. With the March European Council meeting already the agreed forum for discussion of the European Semester, the focus was on immediate actions to help promote growth and create jobs in Europe, without compromising the fiscal consolidation required to ensure fiscal stability. Important measures were agreed in the three priority areas highlighted for discussion: unemployment, especially of young people; access to finance for small and medium enterprises; and the Single Market.

At President Van Rompuy's request, I set the scene for our discussions on SMEs, focusing on what we in Ireland have been doing. I made reference to two key concerns - ensuring access to finance and reducing red tape - that must be addressed if SMEs, the engines of economic recovery, are to be able to fulfil their potential. I highlighted some of the key steps that are being taken in Ireland, including through the now published Action Plan for Jobs 2012. I described some of the targeted measures we have taken, including the reduction in VAT on tourism services, the cut in PRSI for employers of low earners and the reform of our bankruptcy laws. I also pointed to our encouragement of new and innovative companies, including through ensuring that small and medium enterprises can access research and development funding and providing a sales and marketing tax credit to companies exporting to new markets in emerging economies. I suggested that we should seek to learn from each other - on what works and what does not - by exchange of best practice and that we should return to the discussion in June. This is reflected in the statement adopted at the meeting.

As I have indicated to the House, Ireland co-sponsored two papers in advance of the meeting which addressed important national concerns. These included the following: priority actions to complete the Single Market, including in particular the significant potential we believe exists in the area of the digital Single Market; the further reduction of regulatory burdens on the SME sector; the better targeting of labour market supports, including a new focus on youth unemployment; and a stronger emphasis on the external dimension of the Single Market and the growth potential of third country trade. These were an important input to the text that was eventually agreed. Both papers have been laid before the House. As is usual, we also contributed drafting suggestions on the statement on growth and jobs, both ahead of and at the meeting.

Reaching agreement on the new treaty at the informal European Council was another important milestone. While much, if not most, of the treaty is already provided for in the EU treaties and EU law, it takes this onto a new level in ensuring that everyone will play by the rules and be held to account if they do not. This is an important consideration for Ireland.

As to whether a referendum will be required, my answer remains the same. Following the Government meeting earlier this month, the Tánaiste wrote to the Attorney General formally seeking her advice on whether a referendum will be required to allow Ireland ratify the new treaty. As the House is aware, the Attorney General is studying the legal implications carefully and will deliver her advice in due course. Once her advice is received, the Government will consider it carefully and will take whatever decisions are necessary. If a referendum is required, one will be held.

It is important that we place the new treaty in the right context. It is a part of the jigsaw, not the full answer. We need to continue to focus on growth and jobs, and we need to ensure that we have convincing and robust firewalls in place.

The informal European Council was the first contact I had with President Sarkozy since 9 December. Ahead of last month's meeting, I spoke with a great many colleagues, in person and on the phone, including the Dutch, Danish, Finnish, Austrian, Spanish and Italian Prime Ministers. The Tánaiste also spoke with many of his colleagues, including Deputy Prime Minister Clegg.

In these conversations, I identified Ireland's priorities for the meeting, including an agreement on the new treaty that fully protected Irish interests and ensuring a full and meaningful discussion on growth and jobs. Both of these objectives were fully secured. I did not raise the question of the Anglo promissory note at the meeting – it was not the right forum in which to do so. As the House is aware, discussions are continuing at technical level on how the Irish programme can be improved to assist in the sustainability of our debt, including in discussions with the troika. The role of the European Central Bank did not feature in discussions at the informal European Council. As I outlined earlier, this informal meeting had a particular focus on two issues: the new treaty and the question of growth and jobs. The question of corporation tax and the Commission's proposal for a common consolidated corporate tax base also did not arise.

As the House is aware, I met with Chancellor Merkel ahead of the December European Council meeting. Ahead of the meeting of the European Council on 1-2 March I will travel to Berlin on Thursday for a working dinner with Chancellor Merkel and the Prime Ministers of Latvia and the Czech Republic. The following morning I will meet with Prime Minister Monti in Rome. I have no immediate plans to meet with Prime Minister Papademos; however, I will of course see him at next week's European Council meeting.

The Cabinet Committee on European Affairs has met on two occasions since it was established, on 10 November 2011 and on 19 January 2012. I chaired both of these meetings. The Cabinet committee will be meeting on an increasingly regular basis in the course of this year as the Irish Presidency of the EU Council of Ministers approaches.

Ireland fully supports the goals of the Europe 2020 strategy. The emphasis of the European Semester on strengthening the alignment between budgetary priorities and structural reforms is the right one. It is consistent with the direction we have set for ourselves in this country and complementary to the programme for Government.

Ireland submitted its national reform programme to the European Commission in April last year. As part of the 2012 European Semester, the Government will update the European Commission on progress by 13 April. Countries that, like Ireland, are participating in an EU-IMF programme, are not required to prepare a full national reform programme and a stability or convergence programme for submission in April. That is because the extent of the monitoring and reporting already taking place through the quarterly reviews is seen as rigorous and largely sufficient. However, we will, nonetheless, be preparing a review of national progress under the Europe 2020 strategy for submission. My Department is co-ordinating this process and work is underway at official level in close co-operation with the other Government Departments that have lead responsibility for the various policy areas.

I fully expect to adhere to the timeline set out by the Commission and look forward to engaging constructively in the second European Semester process.

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