Enda Kenny (Mayo, Fine Gael) | Oireachtas source

Last week was a momentous one for Ireland and the European Union. When we assumed the Presidency at the beginning of January, we stated that 2013 would mark a new phase in the EU's drive for recovery. We also stated that Ireland would be a recovery country and would drive recovery in Europe. On Thursday last I had the opportunity to come before the House to report an outcome on the promissory notes which delivers a fairer and more sustainable arrangement for the Irish people. I said that the new plan will lead to a substantial improvement in the State's debt position over time and that it represents an historic step on the road to economic recovery. I also stated that it shows that the more Ireland is prepared to help itself, the more others will assist us along the difficult path we still have to travel: Ireland and Europe working hand in hand, making progress together towards recovery.

When I left the House, I travelled to Brussels for an important meeting of the European Council on the multi-annual financial framework. As stated last week, the main item on the agenda was the search for agreement on the Union's future budget. Nobody doubted that this would require long and difficult negotiations and this proved to be the case. However, following discussions which lasted through the night, we emerged on Friday with a result that is good for Ireland and good for Europe. That result fully secures our national interests. Under the new framework, our payments to the Union's budget will be of the order of €10 billion while our receipts will be in the region of €12 billion. Ireland will remain a net recipient, at least until 2020.

In the context of a budget that is smaller overall, the outcome provides for a strong Common Agricultural Policy, CAP, supporting a strong agricultural base and helping to drive economic growth and recovery. Ireland's key national priority was fully secured.

The framework agreed to last week contains an allocation of over €343 billion for heading 2, Sustainable Growth and Natural Resources, delivering €1.5 billion per year in direct payments to Ireland.

In addition, in the negotiations the Irish team - I pay tribute to the role played by the Tánaiste and the Minister of State with responsility for European Affairs - argued strongly that the impact of the economic crisis in this country had to be reflected in any deal. Our partners agreed with that assessment and in the agreement reached last Friday special allocation was made for the Border, midlands and western, BMW, region, in particular, which will receive an additional €100 million. We also secured an additional €100 million for Ireland under the heading of rural development. That is an important contribution which will help to underpin our efforts to make agriculture and agri-businesses important drivers of our economic recovery. We also stressed the need to tackle unemployment, specifically youth unemployment. As the House is aware, this is a problem that has reached unprecedented levels, with some member states experiencing rates well in excess of 50%. Europe cannot afford another lost generation, which situation is unacceptable. I very much welcome, therefore, the focus the issue has been given in the new budget and that Ireland will share in a €6 billion fund being set up to tackle youth unemployment in those countries in which the challenge is greatest.

Ireland strongly supported the original proposal for the multiannual financial framework, MFF, made by the Commission, but one way in which we considered it fell short was the absence of continued funding for the PEACE programme. In the context of recent events, it is clear that a job of work remains to be done if we are to secure lasting peace and reconciliation on the island. The Tánaiste and I advanced this case strongly throughout the negotiations and successfully secured a provision of €150 million for the PEACE programme in the new budget. That is a considerable sum which will be spent to best effect. As I have said, it is a good outcome for Ireland, but it is also a good outcome for Europe. It is a budget designed to help lift Europe out of the crisis it has faced in recent years. It is forward looking. It supports jobs, growth and economic recovery, the pillars of Ireland's Presidency. It has an emphasis on growth enhancing areas, including education, research and innovation. A total of €125 billion has been set aside for the area of competitiveness, growth and jobs, with the Erasmus programme and research and development being singled out for real growth. It is a budget that maintains solidarity with the less developed member states of the European Union.

The House appreciates well the extent to which Ireland has been able to make good use of the funds it has received during the years through the European Union's Structural and Cohesion funding. Ireland is held out as one of the best examples of the effective spend of European moneys. Though we are no longer a large recipient, we argued throughout the negotiations that such funding was a win-win, allowing those member states that needed to catch up to do so, while providing new markets and opportunities for business in the more developed member states. Promoting economic, social and territorial cohesion is an important objective of the European Union. That cohesion policy is the main instrument though which it is pursued. I am pleased, therefore, that a significant portion of the budget agreed last week - €325 billion - will continue to be dedicated to that goal. The framework adopted last week also reflects current economic realities in making every euro count. At €960 billion, it represents a decrease of around 3% on the last MFF.

As the House will be aware, a number of member states argued very strongly for even more financial restraint and deeper cuts. This was a key issue in our discussions last week. While Ireland supported the proposal made by the Commission which was higher than the framework agreed to, I am confident that the right balance was struck in the compromise hammered out. The frank political reality is that Ireland is not alone among member states in having to take tough decisions to bring public spending into line and this was inevitably going to be reflected in any outcome. What we have now is a leaner budget but one with the right focus and emphasis. There will be less spent on administration and more on those areas with the potential to deliver jobs and growth.

I went to last week's European Council to seek a good deal for Ireland and a good deal for Europe and I am confident that these goals were secured. I also wanted to impress on colleagues the importance of the final deal being one that could secure the consent of the European Parliament. The days when member states can act alone on the budget are long gone. As Presidency, we have the responsibility of bringing the European Parliament on board. This is required since the Lisbon treaty was agreed to. Following last week's agreement, the Commission will prepare a draft regulation on the MFF and an inter-institutional agreement between the Council, the Commission and the Parliament. Once these are agreed in Council, we will bring them to the Parliament. In his presentation to the European Council last week President Schultz of the Parliament made it clear that the Parliament's support could not be taken for granted. In last week's negotiations it placed particular emphasis on the need for the budget to be realistic, as I believe it is, and for it to contain within it sufficient flexibility to deal with whatever lay ahead. The framework will be in place from 2014 until 2020 and it is difficult to predict with any degree of certainty the economic situation that will prevail over such a long horizon. In inviting the three institutions - the Council, the Commission and the Parliament - to come to an agreement on the funding of each programme and fund, it was, therefore, appropriate that the European Council suggested that, in doing so, they include the possibility of a review. That will enable us to reflect at mid-term on whether the assumptions on which the framework agreed last week were based remain valid.

The European Council has also agreed that within the new framework what it calls specific and maximum flexibility will be implemented to allow the Europen Union to fulfil its obligations. This is something we will explore with the Parliament in the negotiations ahead. While I recognise that these negotiations will not be easy, I have told President Schultz that the Irish Presidency stands ready to work co-operatively and in good faith to deliver an agreed outcome. We will also do our very utmost to ensure the almost 70 separate pieces of sectoral legislation, or dossiers, on which the framework will rest are adopted by the Council and the Parliament in good time. That is a key task for us in holding the Presidency.

The outcome on the MFF was a good one for Ireland and Europe. That is true also of the substantial conclusions adopted on trade, with which I was very pleased. Consideration of trade issues at the first European Council meeting to be held during our Presidency of the Council was timely and welcome, gelling well with the priorities we have set for our term. As I have said previously, an ambitious trade agenda is a critical element in our push for sustainable growth and job creation across the European Union. The scene for last week's consideration of trade issues was set by a useful European Commission paper which President Barroso shared with leaders ahead of the summit. The conclusions adopted reflect the real potential trade can deliver - potentially a 2% increase in growth in tandem with up to 2 million jobs. These are very serious numbers that we want to see turned into reality, with obvious beneficial effect in Ireland. It is estimated that in the next decade to decade and a half approximately 90% of global economic growth will be generated outside Europe. Europe must, therefore, position itself to take maximum advantage of these major external sources of growth. For Ireland, as a small, open trading economy, we have long seen and appreciated the way trade in goods and services can energise the economy. It is most welcome that that potential is reflected clearly in the European Council's decisions. While the European Union remains committed to further development of the multilateral trading system, last week's European Council agreed that our immediate priority must be developing our bilateral trade agenda. In doing so, we will prioritise negotiations that will provide most benefit in terms of growth and job creation. That has to be the right approach.

In setting out our Presidency programme we said the Irish Presidency would place a special focus on the European Union-United States trade relationship, with the aim of working towards a formal Council mandate for the start of negotiations on a new comprehensive EU-US free trade and investment agreement. There is now real momentum behind this project. Last week the European Council called for urgent follow-up during our Presidency to the report of the EU-US high level working group, expected to be published today. Last night it received a real boost in President Obama's State of the Union address when he gave his imprimatur to the launch of the talks because "Trade that is free and fair across the Atlantic supports millions of good-paying American jobs." It will also support good paying European and Irish jobs. Nobody knows better than us in Ireland that this is a two-way street.

I commend the President on his early authorisation of the start of discussions here. In reply to him, I offer the absolute commitment of the Irish Presidency to taking this work as far forward as possible during its term.

Last week's European Council adopted conclusions on the Arab Spring, Syria and Mali, about which the Tánaiste will speak during his contribution to today's debate.

Last week was good for Ireland and Europe. The achievement of a positive outcome on the promissory note was, in no small part, a reflection of the slow and painstaking work that has been done to rebuild and restore Ireland's reputation in Europe. It demonstrates clearly that our partners appreciate our seriousness of intent and will row in behind Ireland in our efforts to secure our recovery. That commitment is also reflected in the outcome of the negotiations of the Union's budget, in which partners were prepared to take concrete steps to recognise the particular circumstances of this country and the impact the economic crisis has had on it.

Last week should help to restore confidence in Europe, both in Ireland and across the Union. Despite the sometimes very different perspectives and interests that the Union's member states and institutions bring to the table, the capacity to reach compromise and to take difficult decisions remains very strong. We will continue in our efforts to secure our economic recovery, and we remain committed to delivering a Presidency that makes a real difference. As time passes, I will be happy to update the House on these developments.

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