Enda Kenny (Mayo, Fine Gael) | Oireachtas source

I am pleased to have this opportunity to brief the House on the outcome of last week's European Council meeting in Brussels on 22 and 23 November. The main item for discussion at the meeting was the Union's multiannual financial framework, MFF, its budget for the period 2014-20. As the House will recall, negotiations on the MFF have been underway since the European Commission put forward proposals in June of last year. These negotiations have been highly complex and contentious. Last week's European Council meeting ended without the member states reaching agreement. Nevertheless, I am confident that a deal can be reached before too long.

On 13 November President Van Rompuy put forward a compromise proposal for discussion at the November European Council. This proposal contained a range of cuts for all headings of the MFF, with the greatest cuts to be applied in agriculture and cohesion spending. This was seen by some member states as cutting too deeply, and by others as not cutting enough. As far as we were concerned, it cut too deeply into the CAP. Prior to the meeting of the European Council, I spoke to a number of my counterparts, including UK Prime Minister Cameron and French President Hollande, to make Ireland's concerns clear and to hear their priorities and their appreciation of the state of negotiations.

Throughout Thursday, 22 November, before the European Council meeting commenced, President Van Rompuy, accompanied by Commission President Barroso, met bilaterally with each of the members of the European Council to get a feel for the priorities with which each was approaching the table. I made a number of points to President Van Rompuy when I met him. First, I told him that the challenges posed by Ireland's particular economic situation make a pro-growth EU budget essential. Second, I made it quite clear to him that the Common Agricultural Policy is Ireland's most important financial priority in the MFF negotiations. We get the bulk of our EU receipts from this heading. I told him that we could not accept the cuts that he had proposed. Third, I told him that cohesion policy should reflect the current economic situation in EU regions, in particular the levels of unemployment. Finally, I put a strong case to him for maintaining the PEACE programme, which has played an important role in helping to sustain peace on this island. President Van Rompuy listened carefully and took the views I expressed on behalf of Ireland on board.

On foot of his bilateral meetings with Members of the European Council, he made a revised proposal on Thursday evening. This maintained the same level of overall cuts to the overall budget but with the balance shifted in that greater levels of funding were suggested for agriculture and cohesion. Cuts were proposed to expenditure relating to infrastructure, research, and external action, all of which are important priorities in themselves. There is strong pressure on the funding available under heading two for the CAP. That downward pressure was reflected in the Commission's initial proposal, which represented a real decrease of about 7% from the current framework. The trend continued in the proposal made by President Van Rompuy on 13 November, ahead of the summit, which removed a further 6.2%, or €25.5 billion, from the equation. However, as a result of the strong and assertive lobbying by Ireland and like-minded member states, I believe we are turning things around. Some of the ground was made up in the proposal which President Van Rompuy put to the meeting last Thursday.

Of course, his proposal was not agreed and, therefore, we can take nothing for granted. As is always the case, nothing is agreed until everything is agreed but it shows that the negotiations are moving in the right direction. We are now closer to where we want to be but we are not there yet. We will keep the pressure up. We will continue to work closely with those member states which support our position and we will continue to make our case. The CAP is a forward looking and growth oriented policy. It is one of the truly common policies of the Union. It must be properly funded into the future. The food area remains the largest manufacturing sector in the Union in terms of employment.

Discussion took place among the members of the European Council on the evening of the 22nd and then again on the 23rd. I made Ireland's position on the MFF, and the CAP in particular, very clear to our EU partners. The House will recall that we have consistently called for the EU's budget to have the right mix of priorities, a fair allocation of resources and a focus on jobs and growth. We have called for the to be CAP adequately funded to support a vigorous, consumer focused agricultural production base in Europe and a vital tool for economic growth. We have called for an EU budget that has adequate resources for other growth enhancing measures, including research, education, European connectivity and support for the SME sector. Other member states similarly put forward their views on the MFF at the meeting.

Unfortunately, the meeting ended without agreement. A short statement was agreed, which gave President Van Rompuy and President Barroso a mandate to continue work on the MFF and consult with member states in the coming weeks to find consensus on the MFF. The statement noted that the bilateral meetings with President Van Rompuy and the constructive discussion within the European Council showed a sufficient degree of potential convergence to make agreement possible in the beginning of next year and expressed confidence that the existing divergence of views could be bridged. It is, of course, disappointing that the European Council ended without reaching agreement. Nevertheless, I feel that progress was made and that the meeting was useful in a number of respects. First, the meeting took place in a constructive atmosphere. Member states made their positions clear without acrimony and were able to agree the statement without difficulty. There is no prospect of lack of agreement on the budget distracting from the important work of next month's meeting of the European Council at which President Van Rompuy will present his proposals for a strengthened Economic and Monetary Union. Second, no member state was isolated. It was feared that this might happen, given the particularly strong views of some partners, but a spirit of aiming for consensus prevailed.

Third, the gaps between member states' positions have narrowed somewhat. We do not have agreement, but we have the possibility of agreement in sight.

President Van Rompuy must now continue his work on the MFF. He will consult further with member states with a view to identifying where agreement can be found and will return to the European Council early next year. In the meantime, I will keep in contact with my colleagues, including President Van Rompuy, and Irish officials will do likewise. The failure to reach agreement last week will of course have implications for our Presidency of the Council of the European Union, which will begin on 1 January, just a little over four weeks away. President Van Rompuy will play the lead role in taking the negotiations forward. The mandate to do so is his. It is the responsibility of the President of the Council to call the Council together when he is of the opinion that there is an opportunity to get agreement on a conclusion to the matter. He faces significant challenges in this, such as the overall amount, the relative amounts for cohesion and agriculture, and the allocations for infrastructure, research and SMEs. He must also find agreement on the contentious issues of the funding of the budget, the sources of revenue the EU should have and the kinds of rebate that are made available to member states in particular circumstances. I am confident he will succeed and I have said to him that Ireland in its upcoming Presidency will support and assist him in any way he wishes. We are at his disposal in this work.

Once agreement is achieved by the Council, it will be necessary to secure the consent of the European Parliament for the new framework. This will be an important challenge for our Presidency. This is the first framework negotiated since the Lisbon treaty entered into force and the Parliament's consent is required for the framework to be adopted. This should not be forgotten. There can be no MFF without the Parliament, a point of which I remind European Council colleagues when we sit down to negotiate a deal. That point was also made strongly by President Schulz when he addressed the Dáil.

Once agreement is achieved in the Council, working with the Parliament will be a key task for our Presidency. We will also have specific responsibility for advancing almost 70 pieces of legislation that will underpin the MFF. These cannot be finalised until the MFF as a whole is agreed, since the amount of funding and many of the conditions and elements for this legislation will only be set in the final MFF agreement. We will therefore work with President Van Rompuy to help to secure the earliest possible agreement so that we can make the kind of progress we have envisaged for the six months of our Presidency. At the end of the day, any agreement on the MFF must be one that reflects the current economic realities, provides the means to invest in growth and jobs and can be perceived by the electorates of Europe to be fair. It must also be one reached by consensus.

As a Union, we face a challenging global environment. The Union makes our position in the world stronger and we are at our most effective when we act together. If that spirit guides us in the negotiations ahead, I remain confident that agreement will be achieved. It will not be a deal in which any one partner, including Ireland, gets everything it wants. It will be a compromise, but it will be a deal that enables the Union to set its course for the next seven years.

While the firm focus of last week's meeting of EU leaders was on the MFF - the reason the meeting was called - Heads of State and Government also addressed briefly one other piece of business, namely, the filling of the vacancy on the executive board of the European Central Bank, which has been outstanding since the beginning of June. In line with the procedure set down in the EU treaties, the European Council appointed Mr. Yves Mersch of Luxembourg to the executive board of the ECB as and from 15 December 2012. I supported and warmly welcome this decision to appoint a person of recognised standing and professional experience, these being the requirements for this position as set out clearly in the treaties. This decision was made following a recommendation by the Council as well as opinions provided by the ECB's governing council and the European Parliament, which in the latter case provided a negative opinion on the grounds of lack of gender balance. I regret that the decision last week of the 17 euro area member states was not unanimous in appointing Mr. Mersch. One euro area member state opposed the appointment, but not on the basis of gender balance nor out of concern that the candidate did not meet the requirements for the job. I wish Mr. Mersch well in his important work as a member of the ECB's executive board.

I wish to assure the House that in our Presidency of the Council of the European Union from January next - and indeed in advance - we will continue to work with President Van Rompuy and with our partners to ensure that the Union provides itself with the kind of multi-year budget which will facilitate our collective endeavours at EU level. It is strongly in the interests of Ireland - as a member state and in our Presidency - and of the entire European Union that we reach agreement on a new MFF as early in the new year as possible. I will of course keep the House fully informed on developments in this area.

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