Eamon Gilmore (Dún Laoghaire, Labour)

I move: "That the Bill be now read a Second Time".

I am pleased to introduce the European Communities (Amendment) Bill 2012 following the outcome of last week's referendum. The history of the European Communities Act itself stands as a reminder of the length and depth of Ireland's relationship with what has become the European Union. It has served as the means of domesticating each successive treaty in Irish law. It charts our progress as the Union has widened and deepened.

Our journey in Europe has been a positive one for this country and for its people. Last week's result takes that journey another step forward. It has sent, and has been received, as a strong signal that Ireland wishes to remain in the mainstream as a committed member state. It has underscored our commitment to a strong and stable euro, the currency we share with our partners. It has strengthened our hand as we face into one of the most important and significant periods in the Union's history.

Throughout the referendum campaign, the Government argued that in Ireland, as in Europe, stability is necessary for growth, and growth is necessary for recovery. This reality has now been accepted at the highest levels within the Union and developing a growth strategy for Europe will be the foremost item for discussion when the European Council meets later this month.

Key issues for discussion on that occasion will include mobilising all Union policies, especially the Single Market, and ensuring a better flow of finance into the economy to create jobs and growth, whether this is from the EIB or through project bonds. We will avail of all possible synergies between action at European and national level to contribute to job creation, with youth unemployment a particular priority for us.

An important debate is also taking place on what steps are necessary to restore stability to the euro and to take economic and monetary union to a new stage. President Van Rompuy is working to identify the main building blocks that will be needed and the best way in which this work can be advanced. He is doing so in conjunction with the presidents of the Commission, the ECB and the euro group and will report to leaders at the end of the month. I welcome this forward looking approach. The time has come to move on.

I hope the collective approach will be both practical and ambitious. It is very clear that Europe's problems will not be resolved unless and until growth is delivered, until the poisonous link between banking and sovereign debt is severed and until difficulties in the banking system are confronted and dealt with resolutely and credibly. The outcome of this discussion must be a solution that works for Ireland and that assists our recovery, including in making our bank related debt more sustainable.

Throughout the referendum campaign we heard from people of the very real impact the crisis is having on their lives. People are under real pressure and are worried for their own future and for that of their children. The Government is very conscious of the high burden of responsibility it carries. We know that all of the high level discussion in the world is of little value unless it makes a real and tangible difference on the ground for our people, our families and our businesses. The Government will take last week's result not just as a vote in favour of the passing of the treaty itself, but as a call to redouble our efforts to work for recovery and fresh hope.

The Bill is short and technical in nature, but significant in its import. The Government published it at the beginning of last month, in line with our explicit commitment to make available, well in advance of the referendum, all legislative proposals that were in any way related to the proposition put to the people concerning the Stability Treaty last week. It was in full knowledge of the Government's clearly stated intention to legislate for the amendment to Article 136 of the Treaty on the Functioning of the European Union, in order to provide that legal underpinning to the ESM, that our people went to the polls on Thursday last. The Bill, thus, is part of the legislative follow-up to the popular will and solemn decision of the Irish people, as explicitly expressed through last week's vote. It is all the more important for that.

The purpose of the European Communities (Amendment) Bill 2012 is to amend the European Communities Act 1972 to do a number of important things. It provides that the Protocol amending the Protocol on Transitional Provisions annexed to the Treaty on European Union, to the Treaty on the Functioning of the European Union and to the Treaty establishing the European Atomic Energy Community, and the European Council decision amending Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for member states whose currency is the euro, shall both form part of the domestic law of the State. If the Bill is passed, these two elements would, upon ratification by Ireland, become a part of the domestic law of the State.

The first element is the protocol on transitional measures on the composition of the European Parliament.

The Lisbon Treaty provides for 751 seats in the Parliament, compared to 736 seats previously. The allocation of these seats under Lisbon increases the number of MEPs allocated to 12 member states, while reducing Germany's allocation from 99 to 96, which is the maximum for any member state. Ireland's number of MEPs remains unchanged.

This protocol bridges the gap between the existing Parliament which was elected in June 2009 before Lisbon entered into force and that which will be returned in 2014. The aim of the protocol is to include in the current parliament the additional seats which are provided under the Lisbon Treaty. In June 2009, 736 MEPs were elected and an additional 18 "shadow MEPs" were given observer status in anticipation of the entry into force of the Lisbon Treaty. The European Council in December 2008 and June 2009 adopted declarations to the effect that transitional measures were to be adopted as soon as possible to provide legally for the additional MEPs, while not reducing Germany's allocation until the next elections to the European Parliament in 2014. The protocol was agreed and signed by all member states on 23 June 2010. Ireland ratified the protocol on 23 November 2010, with the deposit of our instrument of ratification with the Italian Government in Rome.

Following ratification by all EU member states, the protocol entered into force on 1 December 2011. The entry into force of this protocol thus regularises the position of the 18 "shadow MEPs" and as a consequence the current Parliament exceptionally now has 754 members. From 2014, the Parliament will revert to having 751 MEPs, as intended in the Lisbon treaty. The impact of this protocol is thus entirely temporary, however as this protocol represented a change to the EU treaties, a change to the European Communities Act is thus necessary to provide for that change in domestic law.

The second element provided for in the Bill to become part of the domestic law of the State is the European Council decision amending Article 136 of the Treaty on the Functioning of the European Union, TFEU. Before elaborating on the European Council decision of 25 March 2011 amending Article 136 of the TFEU, I wish to provide the House with some background and context to the decision. When the economic crisis broke in Europe, and in particular when Greece came under severe pressure in the markets, the EU did not have a rescue mechanism through which loans could be advanced to a member state in difficulty. Loans to Greece were, therefore, made through a complex set of bilateral arrangements. That was clearly not a sustainable position. In June 2010, therefore, the European financial stability facility, EFSF, was established with the aim of preserving financial stability in the euro area.

It will be recalled by the House that the EU-IMF package for Ireland includes loans to the order of €17.7 billion from the EFSF. It will also be recalled that loans from the EFSF may be issued only up to June 2013, and that the EFSF is to be liquidated on a date after that when there are no longer loans outstanding. The EFSF was always intended to be a temporary facility. In October 2010, the European Council agreed on the need for member states to establish a permanent crisis mechanism. Difficulties in financial markets led to an acceleration of pace, and the euro group of finance Ministers, at a meeting on 28 November 2010, following a proposal from the Commission, agreed the main features of the future crisis mechanism, to be called the European Stability Mechanism, ESM.

At its meeting on 16 and 17 December 2010, the European Council agreed that the Treaty on the Functioning of the European Union should be amended to make reference to a permanent mechanism to be established by the member states of the euro area to safeguard the financial stability of the euro area as a whole. It was agreed that Article 136 of the TFEU be revised by adding a paragraph as follows:

The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionally.

The meeting of EU Heads of State or Government on 24 and 25 March 2011, adopted the decision amending Article 136 of the TFEU. The amendment to the TFEU will enter into force when it has been approved by all the member states in accordance with their respective constitutional requirements. The European Council called for the rapid launch of national approval procedures with a view to its entry into force on 1 January 2013. The amendment of Article 136 of the TFEU will provide a legal underpinning to the ESM, which is to enter into force next month. Throughout the referendum campaign the Government made clear our strong view that the coming into force of the ESM is very much in Ireland's interests. It follows logically that providing for the amendment to Article 136 of the TFEU, which underpins it, is also strongly in our national interest.

I note that the ESM Bill itself, which was published by the Minister for Finance, will be before this House tomorrow, as I understand it. Thus, I do not propose to go into the detail of the ESM treaty or the contents of the ESM Bill. I do, however, wish to be very clear on a couple of related points that were raised during the debate on the stability treaty. First, in light of the people's decision of last week, Ireland will now ratify the stability treaty. Second, through the ESM Bill, we will legislate for the ESM treaty so that Ireland is in a position to have the treaty ratified in time for its entry into force next month. Third, through the Bill before us today, the European Communities (Amendment) Bill 2012, we will legislate to provide for the amendment of Article 136 of the TFEU.

During the referendum campaign we heard a great deal about why Ireland should attempt to veto the ESM, either through failing to legislate for it or through failing to ratify the amendment to Article 136. That was, and is, nonsense in legal and economic terms. Early entry into force of the ESM is very much in our interest. Why would a country in Ireland's position seek to delay a mechanism which will ensure that it has access to future funding, should the need arise? That makes no sense. In legal terms, we do not have the capacity to prevent the ESM entering into force; as the House is well aware, the treaty will enter into force once it is ratified by those providing 90% of its capital. Ireland is providing 1.59%. We do not, therefore, possess a strong lever, even if we were minded to deploy one. Through agreeing to ratify the stability treaty last week the people have voted to ensure Ireland will have access to it. It is the solemn duty of this House, therefore, that their views be respected and fully acted upon as quickly as possible.

As I said at the outset, the Bill before the House today covers two distinct elements. However, in the interests of the efficient management of business, the Government will propose that it be amended to provide for two other elements when it goes through its Dáil Committee Stage next week. It might be useful to the House, therefore, to say something about these new elements today. The first new element will propose that the European Communities Bill be amended also to provide that certain parts of the Croatian accession treaty shall become part of the domestic law of the State, as soon as Ireland ratifies the treaty. Approval of this amendment will pave the way for Ireland's ratification of the Croatian accession treaty. The forthcoming accession of Croatia, planned for 1 July 2013, will see the end of the EU integration process for that country; but it will, I hope, also mark the beginning of the accession of all the countries of the Western Balkans. Ireland is a strong advocate of the enlargement process, particularly as it applies to that region.

Croatia's journey to membership has been a long one. In June 2000, at the European Council meeting in Feira, Portugal, the EU confirmed that all the countries of the Western Balkans were potential candidates for EU membership. The EU-Western Balkans Summit that took place in June 2003 in Thessaloniki, Greece, saw the reaffirmation of this European perspective for the countries concerned. Croatian accession is proof that the EU holds to its promises, that the process may be complex, difficult, and demanding, but that there is certainty about the outcome. Ireland has been positively associated with Croatia's accession process from the beginning. During the Irish Presidency in 2004, this country sought and achieved a single clear decision on granting Croatia candidate status. The intervening eight years have seen the Croatians undertake onerous reforms in order to bring their legislation in line with the EU acquis. The acquis has become ever more complex. Croatia was the first acceding country to have to negotiate specific chapters on rule of law, the judiciary, fundamental rights, justice, and security.

Negotiations with Croatia were finally concluded at an Intergovernmental Conference on 30 June 2011. The process of drafting the Treaty of Accession was completed in September 2011 and it was signed in the margins of the European Council meeting on 9 December last. The Taoiseach signed on behalf of Ireland. We have now welcomed Croatia into our meeting rooms as an acceding state with active observer status. That is to allow it to become familiar with the working methods of the EU institutions and to be involved in the decision-making process before its accession. The process of ratifying the accession treaty has also begun. Croatia held a referendum in January on EU accession which saw an emphatic result in favour, with two thirds of voters agreeing to Croatia's future as an EU member state. The Croatian Government proceeded to ratify the treaty on 4 April this year. A further five member states have also ratified the treaty to date.

The task of negotiating and agreeing the terms of membership has been a mammoth one. It involved alignment with tens of thousands of pages of EU legislation. In the process, Croatia was required to make difficult economic choices and brave political decisions. Throughout the process, the EU has worked closely with Croatia, measuring its efforts against the exacting conditions of membership. For our part, Ireland carefully monitored the entire process, especially the conduct of the accession negotiations in policy areas of particular significance to us, such as agriculture, regional policy and institutional questions. The process is not yet complete and the Commission continues to monitor Croatia's progress, with particular attention to the issues of the judiciary, corruption and privatising the shipbuilding industry. Decisions will also need to be taken by individual member states, including Ireland, on whether to allow immediate access to our domestic labour markets for Croatian nationals. However, this is not a matter for decision now.

Croatia's accession will see our European family expand to 28 members. Croatia's success is the best proof of how strong and successful the transformative power of the enlargement policy can be. The Croatia that is on the verge of EU membership is different than the country that applied for accession to the EU nearly a decade ago. Croatia's foreign Minister, Ms Vesna Pusic, visited Ireland last year in her previous role as president of the national committee for monitoring EU accession negotiations. During my meeting with her and her colleagues, she spoke of how the accession process and the reforms it entailed had been to the overall benefit of Croatia. She pointed in particular to the requirements on the judiciary and fundamental rights. This area has seen the greatest reform, which she considered to be the EU membership negotiations' greatest benefit for Croatia.

Croatia's progress has shown others the way and proven that the benefits of European integration are within their grasp. Croatia has shown that it is possible for a country once ravaged by war and inter-ethnic strife to build stable democratic institutions where fundamental rights are respected and the rule of law is strengthened. It has shown that it is possible for a country that declared its independence just 21 years ago to build a competitive economy that is ready to form a part of the Internal Market and that has coped with the financial crisis.

I am also encouraged by Croatia's stated commitment to help its neighbours in the western Balkans to reach their goal of EU membership. The Croatian Government has already generously shared its translations of the acquis with its neighbours. It has undertaken to share its experience of the accession process to help guide others along the path. Croatia will prove to be a responsible member of the Union with which Ireland can work effectively.

As we debate the other aspects of the Bill, it is heartening to be reminded in this time of crisis that EU membership remains attractive and that countries are prepared to make painful reforms in order to join it.

The second amendment to the Bill that the Government will move on Committee Stage will provide for the protocol on the concerns of the Irish people on the treaty of Lisbon, which was signed in Brussels on 16 May to form part of the domestic law of the State. The signing of this protocol represents the culmination of a process that reaches back to the agreement reached among the EU leaders at the European Council meeting of 18 and 19 June 2009 when they agreed upon a decision on the concerns of the Irish people on the Lisbon treaty with regard to the right to life, family and education; taxation; and security and defence. The European Council stated that the sole purpose of the protocol would be to give full treaty status to the clarifications set out in the decision. The protocol will clarify but not change either the content or the application of the Lisbon treaty. In taking its decision, the European Council agreed that, at the time of the conclusion of the next accession treaty, the decision's provisions would be set out in a protocol to be attached, in accordance with the respective constitutional requirements of the member states, to the Treaty on European Union and the Treaty on the Functioning of the European Union.

As Croatian accession is moving closer and the process of ratification of its accession treaty is under way, it is timely that the process of turning the decision into a protocol is also being advanced. I warmly welcome the signing of the protocol, which is a case of our EU partners again delivering on their solemn promises. These are not entered into lightly and are delivered upon as agreed. It is fitting that this amendment is being introduced alongside the Croatian accession treaty. The amendment will pave the way for Ireland to ratify our protocol. I look forward to all EU partners having done so by the end of June 2013, which is the target date for the protocol's entry into force.

This Bill is short and technical, but significant, and touches on some of the most important issues confronting the Union. I look forward to an informed and reasoned debate. I commend the Bill to the House.

See this speech in context