Enda Kenny (Mayo, Fine Gael) | Oireachtas source

I am pleased to brief the House on the outcome of the spring meeting of the European Council which took place in Brussels on 14-15 March. This month's summit took place in an atmosphere of relative calm but its deliberations were no less important for that. As is traditional at the spring European Council, our focus was strongly on economic policy with a particular focus on how we can ensure a return to sustainable growth and job creation.

Ahead of the meeting I informed the House that implementation would be a key message and that turned out to be the case. Leaders agreed that implementation of the broad array of measures already agreed, whether in the areas of the Single Market, the compact for growth and jobs, the recently agreed youth guarantee or the two-pack or the banking union package, would have to be our collective priority. I briefed colleagues on the work of the Irish EU Presidency which is advancing across a range of policy areas to boost jobs and growth.

We have already had some notable successes, including agreements on the two-pack of economic governance measures, the capitalisation of banks, the youth guarantee, which will help our young people get off to a good start, and the reaching of an agreed Council position on the reform of the Common Agricultural Policy. I told the meeting that we would continue with our shoulder to the wheel to the last minute of our period in office because there is no time to be lost.

Progress continues. Since the summit we have reached provisional agreement with the European Parliament on the critical single supervisory mechanism for European banks. This is a keystone in the banking union package and it represents a major and concrete step in making the June 2012 decision to break the debilitating link between banks and sovereignty a reality. I encouraged my colleagues to approach the files on which we are continuing to work across the various formations of the Council with the maximum degree of flexibility and compromise. These include important files in the Single Market on professional qualifications, public procurement and accounting as well as the outstanding elements of banking union. The Single Market is one of the Union's most valuable assets in the search for growth and we must make the most of it.

As is customary, the meeting began with a presentation from European Parliament President, Martin Schulz. He focused on the Parliament's views on the multiannual financial framework, MFF, on which it had cast a resolution critical of the agreement reached at the European Council in February the day before the meeting. That decision gave a mandate to the Parliament negotiating team to seek increased flexibility within the MFF, a review clause and an agreement on own resources. It also stated that the Parliament would not open negotiations on the MFF until the Commission brought forward a draft amending budget to cover unpaid payment claims for 2012. While the MFF was not on the agenda for the meeting I took the opportunity to set out for President Schulz and for colleagues our determination as holders of the Presidency to get full negotiations with the Parliament under way as soon as possible and I stated that I would work in good faith with him to secure agreement.

Following the exchange with President Schulz we moved on to discuss economic and social policy. A key focus in this regard was providing clear direction for national and EU economic policies against the backdrop of unacceptably high unemployment levels; some 26 million are without jobs throughout the Union. While drawing encouragement from the steps taken thus far to stabilise a decidedly difficult set of circumstances, we acknowledged clearly the need to redouble efforts towards growth and job creation. President van Rompuy highlighted four particular strands that capture well the emphasis of what was agreed. The first is the need to restore financial stability and maintain it. This is critical for confidence of consumers and investors alike and it means pressing ahead with work on banking union in particular. The second is the need to ensure that public finances are structurally sound. This entails a path for fiscal consolidation that is both growth-friendly and differentiated, according to national circumstances. The third is the need to bring new urgency to the fight against unemployment, especially of young people. All our efforts are aimed at this overarching goal. Financial stability and economic recovery are the foundations on which the job creation necessary to respond to the unemployment crisis will be built. The fourth is the need to support long-term growth. This implies continuing to pursue the difficult process of structural reforms, restoring competitiveness and unlocking a new wave of business investments that will underpin a sustainable recovery.

Naturally, these strands are strongly interdependent and we need to press ahead coherently on all four. Member states will prepare their national reform and jobs plans in April, the reviews of which will inform clear country-specific orientations to be agreed in June. Along with the development of these country-specific orientations, a full review of the compact for growth and jobs has been lined up for our June meeting, one year on from its adoption.

The spring European Council noted that the €10 billion increase in the European Investment Bank's paid-in capital agreed last year will help to co-finance up to €180 billion worth of projects in the coming three years. We agreed that the June summit will place a particular emphasis on measures aimed at creating jobs and boosting the financing of the economy for fast-acting growth measures.

The Commission, together with the EIB, will report to leaders on targeted priorities, in particular with regard to infrastructure, energy and resource efficiency, the digital economy, research and innovation and small and medium sized enterprises. I will meet the President of the EIB, Werner Hoyer, again in Dublin next month to discuss these matters, as will the Minister for Finance, Deputy Noonan, and the Minister for Public Expenditure and Reform, Deputy Howlin. In line with what the Government has said since coming to office, I am satisfied that this meeting of the European Council recognised the urgent need to address unemployment, especially among the young. It is the most important challenge we face. This corresponds with our priorities as Presidency; our drive for stability, jobs and growth are not abstract ambitions. Rather, they are the means to achieve and secure a jobs-rich recovery. Again, implementation must be the key.

Ahead of the meeting, President Van Rompuy wrote in stark terms to members of the European Council setting out his strong disappointment at the unacceptable delays in delivering progress on key Single Market files. This was something we also discussed. As I have stated, delivery is a key priority for us as Presidency. We need to conclude work urgently on Single Market Act I files that remain open, while aiming for as much progress as possible on key Single Market Act II files as they are published over the coming months.

This meeting agreed further important action on cutting red tape. An extensive consultation with small and medium enterprises has identified the top ten areas of EU legislation that impose the highest compliance burdens. The Commission will come back to leaders in June with concrete proposals to address these SME concerns. In identifying the top ten most burdensome EU laws, the Commission included the following in the top five: REACH, Registration, Evaluation, Authorisation and Restriction of Chemicals; the value added tax legislation; the general product safety and market surveillance package; the recognition of professional qualifications; and, the shipments of waste and waste framework legislation.

The Commission will ensure swift and effective implementation of its regulatory fitness or REFIT programme, rapidly identifying the regulatory areas and tranches of legislation with greatest potential for simplifying rules and reducing regulatory costs. We look forward to its first proposals in this area in the autumn. This is also a key focus for us domestically under the Action Plan for Jobs. For example, we estimate that the single application system we are introducing for up to 25 licences is set to save the retail sector upwards of €20 million per annum.

This is led by the Minister of State, Deputy John Perry, and beginning with the retail sector as a pilot project, an integrated licensing application system will be designed in the first half of 2013 and implemented by the fourth quarter of this year.

We did not have a full discussion on strengthening Economic and Monetary Union. That awaits finalisation of the report to be presented in June by President Van Rompuy. However, the European Council took the opportunity to recognise again that any new step towards deeper EMU must be accompanied by parallel steps to ensure stronger democratic accountability and legitimacy. We have also been asked by President Van Rompuy to address the social dimension and as we move forward, we must never forget the necessity to bring people with us.

A key element in qualitatively deepening EMU is, of course, banking union. The Irish Presidency continues to give top priority to files relating to the promotion of banking union and the good progress we are making was recognised by the European Council. We have achieved provisional agreement with the European Parliament on the single supervisory mechanism, SSM, as well as reaching agreement on the capital requirements directive, or CRD IV as it is known. These are significant achievements which represent important steps towards banking union, restoring confidence in the European banking system and building stability across Europe. The setting up of the supervisor will pave the way for the European Stability Mechanism to take on the direct recapitalisation of banks.

Intensive efforts are under way by the Irish Presidency to accelerate Council discussions on the banking resolution file, with a view to reaching agreement on key political issues. All of this important work is under way in the context of the key decisions made by the Heads of State and Government on 29 June last year, when “they affirmed that it is imperative to break the vicious circle between banks and sovereigns.” We will spare no effort in working to deliver on that commitment. The discussions in that context are being led by the Minister for Finance.

Following the conclusion of discussions at the European Council on the Thursday evening, leaders of the 17 euro area member states met for a euro summit meeting. We heard from ECB President Draghi on how to lay the foundations for growth. In his interesting presentation he highlighted some of the critical factors required, including confidence, credit and competitiveness. This was followed by a useful exchange in which we each reflected on some of the key issues confronting individual member states. In this discussion I highlighted the progress Ireland had made towards recovering its competitiveness as we looked forward to exiting our programme later this year.

While we welcomed the new Cypriot President, Nico Anastasiades, to the table, we did not discuss the developing situation in Cyprus in detail as it was to be discussed by Finance Ministers in the eurogroup chaired by Dutch Finance Minister on the Friday afternoon. It is welcome that it has been possible for the Cypriot authorities to reach an agreement with the troika that will allow a programme of support to be put in place. As the House will be aware, this was a very complex and sensitive process and will be exceptionally challenging for the Cypriot people. From hard won experience, we in this country know the real strain associated with the agreement of such a programme and the genuine anxiety and concern it causes among citizens. I hope it will be possible for the Cypriot Government and people to focus fully on economic recovery, although I appreciate there is a very difficult journey ahead. I assure them that the Government and people of Ireland are with them at this difficult time and that they can rely on our support as they seek to emerge from their difficulties. I very much welcome the fact that all deposits in Cypriot banks below €100,000 have been fully safeguarded. This is an important reassurance for savers across the European Union. Unfortunately, given the debt dynamic in Cyprus, there were simply no easy options available. The path now agreed, although onerous and challenging, represents the best available outcome in these very difficult circumstances for the Cypriot people.

While economic matters were the focus of our work on the Thursday afternoon and evening, on Friday morning, 15 March, we moved on to foreign policy matters. We had a useful and welcome discussion on the European Union’s strategic relationships, with a special focus on Russia, one of a series of such discussions planned by President Van Rompuy. The wide-ranging and positive discussion, in which the complexity of our relations with Russia was fully recognised, focused on the many areas in which we enjoy strong co-operation in mutual trade and investment; our energy relations; and our relations as partners in international fora in the pursuit of peace and security. It also addressed the areas in which there were differences and we reflected on how best to convey our differing views in our dialogue with Russia. There was a clear agreement that the European Union must adopt a more co-ordinated approach to its relationship with Russia and that we needed to work towards a stronger, single EU message on key issues in the strategic partnership.

Also on Friday morning Prime Minister Cameron briefly updated leaders on preparations for the G8 Summit, which will take place in Lough Erne, County Fermanagh in June. The main agenda will deal with terrorism, tax, transparency and trade. We are co-operating closely with the British authorities to assist in ensuring the success of this significant event.

Before the meeting concluded, the issue of EU policy on Syria and, in particular, the question of the arms embargo were briefly raised by President Hollande and Prime Minister Cameron. After a short exchange of views, it was agreed to ask EU Foreign Ministers to address this topic as a matter of urgency, starting with a thorough discussion at the informal foreign affairs meeting that took place in Dublin last Friday and Saturday. As the Tánaiste hosted that meeting in Dublin Castle last weekend, he will address the matter in his remarks later.

While in Brussels, I also had a number of meetings which might be of interest to the House. On 14 March I co-chaired the tripartite social summit, which brings together social partners at EU level. We had an excellent exchange with representatives of European trade unions and businesses on how to move from crisis to stability and to generate growth and employment. We also exchanged views on the social dimension of EMU.

While the multi-annual financial framework was not on the European Council’s agenda, I met Presidents Barroso and Schulz to discuss the consultations we have had with the Parliament to date and ensure we were all working together co-operatively to secure the earliest possible agreement. Putting a budget in place for the European Union for the period 2014-20 will help to ensure a degree of certainty and security that will underpin economic stability. Separately, I had a brief bilateral meeting with Prime Minister Cameron, building on our summit meeting in London earlier this month.

The outcome of this month’s European Council was welcome, for the European Union, as well as for Ireland nationally and in holding the Presidency. There was recognition of what had already been achieved, including under the Irish Presidency, but, more importantly, there was a recognition that a wide range of measures which had been agreed remained to be implemented or to be implemented in full. We must act on these measures. In the coming months, in the second half of our Presidency, we will use all of our energy to make as much progress as is humanly possible across the full range of our priority files, all the time with the objective, front and centre, of restoring stability and encouraging sustainable growth and job creation. I will, of course, continue to keep the House updated on all relevant developments.

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