Enda Kenny (Mayo, Fine Gael) | Oireachtas source

The December meeting of the European Council will take place in Brussels on Thursday and Friday of this week. While economic policy will once again dominate the European Council's agenda, at this meeting we will be looking forward to how best we can strengthen economic and monetary union and in the process provide for a stable underpinning for the common currency into the future. Also under the economic policy heading, leaders will consider the annual growth survey which marks the beginning of the third European semester process which will form an important part of Ireland's work during its Presidency of the European Council in the opening six months of next year.

The meeting will provide an opportunity for Heads of State and Government to adopt a set of conclusions which will lay the groundwork for a substantive debate on the European Union's Common Security and Defence Policy, CSDP, which will take place in December 2013. These preparations will facilitate a more meaningful discussion among leaders this time next year.

The European Council is also likely to adopt a set of conclusions on EU enlargement policy which will set out the work to be undertaken in the coming year, including during our Presidency. This issue was the subject of detailed and lengthy discussions at the General Affairs Council in Brussels yesterday, at which Ireland was represented by the Tánaiste.

In light of the deliberations of foreign Ministers, including the Tánaiste, at the Foreign Affairs Council in Brussels on Monday of this week, it is anticipated that leaders will also adopt conclusions on a number of current foreign policy issues.

I should recall for the House that this meeting of the European Council will not follow up on the discussions that leaders had last month on the Union's budget over the period 2014 to 2020, the so-called multi-annual financial framework. President Van Rompuy and President Barroso are continuing their work to identify means of bridging outstanding differences among member states, and we will return to this issue in the new year.

Over recent years, as the Union has taken a range of steps necessary to overcome the economic and financial crisis and bring stability to our shared currency, it has become apparent that the euro needs to be recast on the foundations of a strengthened economic and monetary union, EMU. These last years have made it crystal clear that the stability and well-being of the euro area and the entire European Union are inextricably linked to the stability and well-being of our currency. The weakness, instability and uncertainty surrounding our common currency has most evidently affected member states in a markedly adverse manner. It is manifestly the case that a stable euro is in the vital national interests of Ireland. Our economic and financial well-being into the future is tightly bound up with the health and stability of the currency that we share with our euro area partners. A healthy and stable euro is good for Ireland, good for the euro area and good for the EU.

The House will recall that European Council President Van Rompuy was asked by leaders at the European Council in June to develop his thinking on the future of the EMU in close co-operation with the Presidents of the Commission, the European Central Bank and the Eurogroup, and to return to us with a "time-bound roadmap for the achievement of a genuine Economic and Monetary Union". President Van Rompuy returned to the October European Council with an interim report which certainly pointed us in the right direction - that is, towards making a reality of the undertaking made by leaders in June to break the link between the sovereign and banks through the establishment of a single supervisory mechanism, SSM, for euro area banks and the banking union more broadly and towards implementation of the various steps we have already taken with regard to economic governance, including the six-pack, the two-pack and indeed the stability treaty. On the latter, I am happy to report to the House that Ireland will complete the process of ratifying the stability treaty later this week with the deposit of our instrument of ratification with the General Secretariat of the Council in Brussels. This last step had awaited the passage of the Fiscal Responsibility Act 2012, which was signed into law at the end of last month. Ireland will thus be among the initial group of twelve euro area member states whose ratification of the stability treaty will trigger its entry into force in due course.

President Van Rompuy's interim report also flagged the ideas of a possible fiscal capacity for the euro area and possible contracts between member states and the EU institutions, perhaps covering the country-specific recommendations generated as part of the European semester process. We now have a suite of documents on this critical issue on the table to orient and inform our discussions in Brussels later this week. First, we have President Van Rompuy's report, which he has prepared in close collaboration with Presidents Barroso, Juncker and Draghi, entitled "Towards a Genuine Economic and Monetary Union". Second, we have the Commission's document, "Blueprint for a Deep and Genuine Economic and Monetary Union - Launching a European Debate", which sets the scene for a longer-term discussion. Third, we have a set of draft European Council conclusions which propose a roadmap for the period up to and beyond 2014. Each of these three documents has a role to play in this important debate and for that I commend their respective authors on their preparation.

In the draft conclusions, President Van Rompuy sets out a proposed roadmap spanning three stages, the first of which is for implementation immediately, while the third is envisaged to be rolled out following the European Parliament elections in 2014 and when a new Commission has been appointed. The first stage, which is intended to run over what remains of this year and next, has a clear focus on implementing what has been already agreed, particularly in the area of banking union. In this regard, I note that the ECOFIN Council is meeting again in Brussels this evening in an effort to finalise agreement on the SSM. Such an agreement would take us closer to delivery of our commitment to having the legislative framework in place, and I wish the council success. The issue is important in itself, including from a national perspective, but it is also an important demonstration of our capacity to deliver what we have agreed. Implementation is very much the focus of the first stage in President Van Rompuy's roadmap, and he has my strong support in this.

The second stage proposed in the draft conclusions would run from 2013 to 2014. It would build on the existing Commission proposals on resolution and deposit guarantees and see the Commission submitting a proposal for a single resolution mechanism authority with an appropriate backstop for those member states participating. Again, we are strongly in favour of this step, which forms a key element of the overall banking union. In this stage, which is intended to be taken forward in 2013 and 2014, President Van Rompuy is suggesting that member states enter into what he is calling "arrangements of a contractual nature" to improve implementation of reform. In common with a great number of our EU partners, we have sought greater clarity on this proposal. We want to know how such arrangements might work, on what basis they would work and who would oversee them. There is a need for greater explanation and elaboration before we can be sure that such arrangements have a role to play. I look forward to discussing this with colleagues when we meet.

Stage three, which would run from 2014, when there will be a new Parliament and Commission in place, foresees further deepening of economic integration in the euro area and the possible establishment of a fiscal capacity which could be used to smooth out shocks and encourage further reforms. As we tease out how such a fiscal capacity might operate, and indeed how it might interact with arrangements of a contractual nature, we will be seeking to ensure that the roadmap as a whole and over time delivers a balanced, consistent and appropriately sequenced range of measures which will really strengthen the EMU and deliver the desired long-term stability to our common currency.

As we deliberate on how to strengthen the EMU, the other ingredient is, of course, how we ensure that our people understand what it is we are seeking to do and why. We must ensure there is an appreciation that no one is proposing that we strengthen the EMU for its own sake. As far the Government and I are concerned, this exercise is without doubt a means to an end, that end being the long-term stability of our currency, our economy and, ultimately, our Union. Improving democratic legitimacy and accountability as we take forward the strengthening of EMU is a prerequisite. Ultimately, how far we go in this regard will naturally depend on how far we intend to take EMU. One complements and accompanies the other. As we move through the stages, as proposed by President Van Rompuy, we need to ensure that accountability structures keep up with developments. These cannot and must not be considered by anyone to be optional extras. They must be integral to the process of strengthening EMU. We in Ireland know this better than anyone. Should some of the measures envisaged for stage three require treaty change, we will need to be able to explain clearly to our people what is proposed and why it would be in the long term interests of this State and the Union as a whole. Strengthened accountability structures concerning decisions to be taken at the European level would be a vital and wholly essential component. Without doubt there will be a role for the European Parliament, but there must also be a strengthened role for national parliaments including, of course, this House. On this, as on other issues, we will need to strike an appropriate balance.

I expect that we will welcome the annual growth survey that was produced by the Commission on 28 November and launches the 2013 European semester for economic policy co-ordination. As Europe slowly emerges from the deepest economic and financial crisis in its history, the Commission is advocating a reinvigorated emphasis on the five priorities identified in last year's survey - namely, pursuing differentiated, growth-friendly fiscal consolidation; restoring normal lending to the economy; promoting growth and competitiveness for today and tomorrow; tackling unemployment and the social consequences of the crisis; and modernising public administration. This emphasis is also reflected in the compact for growth and jobs agreed in June, and I expect that it will be strongly supported.

The annual growth survey feeds into national economic and budgetary decisions that member states will set out in April next in stability and convergence programmes under the Stability and Growth Pact and national reform programmes under the Europe 2020 strategy.

These, in turn, form the basis for the Commission's proposals for country specific recommendations in May.

Effective management of the third European semester process will be an important focus of next year's Irish Presidency. The October European Council invited the incoming Presidency to submit a roadmap for the organisation of this work in 2013. This was presented by the Tánaiste to yesterday's meeting of the General Affairs Council in Brussels and will inform this week's discussions. It sets out in practical terms a response to the key recommendations made in the recent synthesis report from the Cypriot Presidency on lessons learned from the 2012 European semester. The key objective will be to ensure all relevant Council formations work in a co-ordinated and consistent manner towards a thorough preparation for the March and June European Councils. This will include a strong focus on appropriate streamlining of committee work, building also from the Commission's proposals for more regular and ongoing dialogue with member states. This should support a deeper political discussion within the Council based on a shared assessment of common challenges and more constructive engagement on the development and implementation of jointly agreed priorities. Our hope is that country specific issues can be settled to the greatest extent possible through stronger bilateral dialogue and, where appropriate, more effective multilateral surveillance within the relevant committees.

We welcome the European Parliament's efforts to enhance parliamentary involvement. Parliamentary week in January will see debates with members of relevant committees from national parliaments. I understand the Ceann Comhairle has accepted an invitation to participate as Speaker of the Presidency Parliament. I warmly welcome such an engagement, whether it involves the Ceann Comhairle or the Leas-Cheann Comhairle. Further ways to reinforce parliamentary involvement are also being explored.

The European Council is expected to adopt conclusions on the European Union's Common Security and Defence Policy, CSDP. The conclusions will cover the CSDP on missions, capabilities and preparations for a discussion on defence issues at the European Council in December 2013. Leaders are expected to task the High Representative and relevant EU bodies to develop further proposals and actions aimed at strengthening the CSDP and improving the availability of military capabilities and to report on these initiatives by September 2013. The issues to be covered in the report will include increasing the effectiveness, visibility and impact of the CSDP; enhancing the development of defence capabilities; and strengthening Europe's defence industry. This item will be essentially of a preparatory nature at this week's meeting.

The European Council will endorse the conclusions on enlargement agreed at the General Affairs Council yesterday. Given that the conclusions have now been agreed, lengthy discussion is not expected at the European Council. No specific decisions were made that would require agreement at European Council level. However, the conclusions will shape the agenda in the six months of Ireland's Presidency and it is likely that we will have to consider such issues as granting candidate status to Albania and opening negotiations with Serbia and, possibly, Macedonia during that time. In particular, it is the intention that the Council will review progress on the Belgrade-Pristina dialogue in the spring with a view to considering whether to open accession negotiations with Serbia and negotiations on a stabilisation and association agreement between the European Union and Kosovo. We also expect to consider a report from the Commission on Albania's progress in meeting various reforms with a view to deciding on whether to grant candidate status. The Council will examine progress made by the Former Yugoslav Republic of Macedonia on the possibility of opening accession negotiations, provided there is a resolution of the name issue. We welcomed the reference in the conclusions to regaining the momentum in the accession negotiations with Turkey, on which we hope to make progress in the next six months. We also intend to advance the accession negotiations with Iceland and Montenegro. Ireland will oversee consideration of the final monitoring report on Croatia's preparations for accession and we look forward to welcoming Croatia as the 28th member of the European Union on 1 July.

It is expected that the European Council will adopt short conclusions on foreign policy issues. These will draw on the conclusions which emerged from the Foreign Affairs Council earlier this week, at which the Tánaiste represented Ireland. Discussions at the Foreign Affairs Council focused principally on developments in the Middle East and Syria.

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