Enda Kenny (Mayo, Fine Gael) | Oireachtas source

I am pleased to address the House today ahead of the spring European Council, which takes place on 19 and 20 March. The discussions at this meeting will focus on three key issues: energy union, the 2015 European semester, and external relations, to include Russia, Ukraine, the forthcoming Eastern Partnership summit in Riga, and Libya.

As Members are aware, EU Heads of State and Government also had an informal meeting on 12 February. In the early hours of that same day, a package of measures to halt the fighting in eastern Ukraine had been agreed in Minsk. This news was warmly welcomed. More than one month on, our priority will be to assess the extent to which this second Minsk agreement has been implemented on the ground.

Counter-terrorism was also discussed in February. A joint statement, issued by Heads of State and Government after the meeting, committed to the safeguarding of our common values and reinforcement of action against terrorist threats.

Finally, we had some reflection on how economic and monetary union has developed and on how it might be strengthened further, with Commission President Juncker presenting an analytical note on the issue.

A further discussion at senior official level is taking place in Brussels this evening.

Looking ahead to next week’s meeting, the question of how to advance energy union will be a key focus of discussion. Energy union, with a forward-looking climate policy, is one of the five strands of the strategic agenda for the Union as agreed by Heads of State and Government last June. The ambition of realising a meaningful energy union has never been more relevant. Geopolitical events in the Union’s neighbourhood, global energy competition and the realities of climate change all provide significant impetus for forging a much deeper level of co-operation between member states on energy issues.

Discussion at the European Council will be informed by a communication recently published by the Commission on a framework strategy for a resilient energy union with a forward-looking climate change policy. This important strategy has five dimensions: energy security, a fully integrated European energy market, energy efficiency, renewable energy, and research and innovation. The different dimensions are all mutually reinforcing and closely interrelated.

What does energy union mean for Ireland? As a peripheral and, in energy terms, poorly connected member state, Ireland stands to benefit significantly from efforts to enhance Europe’s energy security. Our current relatively high dependence on oil and gas leaves us vulnerable to price and supply shocks. Therefore, EU policies on security of supply, resilience, global energy markets and diversification align well with the emerging themes in Ireland's revised energy policy framework.

Development of adequate infrastructure to promote diversification of energy routes and sources is essential for Ireland and other peripheral member states. Access to financing for this infrastructure, including from the Connecting Europe Facility and the European fund for strategic investments, will be necessary if the full ambition of energy union is to be realised and its benefits shared across all member states.

Ireland also very much welcomes the European Union's ambition to become the world leader in renewable energy. This is important not only with regard to improving climate efficiency and increasing our security of supply but also in terms of economic impact. Across the EU, renewable energy businesses employ more than 1 million people and have a combined annual turnover in excess of €120 billion. In Ireland, we intend to play our part in realising the EU's ambition of becoming the number one player in renewable energy technologies. Our offshore renewable energy resources, such as wave energy, are among the best in the world, and our researchers and entrepreneurs are at the cutting edge of developments in this sector.

Completion of the internal energy market is key to realising energy union and is likely to be an important focus of discussion next week. Improved energy flow across borders, supported by an effective regulatory framework and greater marketplace competition, stands to deliver real benefits for Europe’s consumers, ensuring affordable prices at household level while also supporting the competitiveness of European businesses. Ireland strongly supports the early completion of the internal energy market. However, we must also be careful to ensure the necessary safeguards and flexibilities are in place for small member states and that there is sufficient regulatory stability and policy clarity to encourage major infrastructural investments by the private sector.

At the end of this year, the critical United Nations climate conference will take place in Paris. The European Union has already clearly articulated its targets through the new EU climate and energy policy framework agreed by the European Council last October. I welcome the further agreement at last week's Environment Council on the EU's intended nationally determined contribution, INDC. The INDC is essentially the EU's pledge for the UN process of preparing for the Paris conference. It sets out the steps the EU will take in reducing harmful emissions, as well as addressing other issues such as how it will adapt to climate change impacts. Crucially for Ireland, the INDC includes within the EU's targets the important area of agriculture and land use and land use change and forestry, as agreed at the October European Council. Agreeing the EU's pledge so early in the process has sent a strong signal of our intention to lead by example in the global negotiations.

In the months ahead, it will be important to scale up and build alliances with partners outside the European Union with a view to achieving a legally binding global agreement on climate change in December. The President of the Council, Mr. Tusk, has proposed that the European Council discuss how best to co-ordinate diplomatic outreach and action to maximise the Union’s leverage in the run-up to the Paris conference.

The March European Council will conclude the first phase of European Semester 2015, the Union’s annual cycle of economic policy co-ordination. It will specifically provide guidance to member states for submission in April of their stability programme updates under the Stability and Growth Pact and national reform programmes under the Europe 2020 Strategy. This agenda item will also provide for a broader discussion of economic developments in the Union.

There is now welcome evidence that the EU is finally emerging from protracted recession. This is the first year since the onset of the crisis in which all member state economies are expected to record economic growth. The Commission’s latest forecasts are for GDP growth this year of 1.3% for the euro area and 1.7% for the European Union as a whole. We can expect that lower oil prices, the expanded asset purchase programme recently announced by the European Central Bank and the depreciation of the euro will all contribute positively to what is still a fragile recovery. Importantly, there are signals that the more positive economic outlook is beginning to feed through to Europe's labour markets. The seasonally adjusted unemployment rate in the euro area was 11.2% in January, the lowest rate since April 2012, and 9.8% in the Union as a whole.

A more positive economic forecast for the euro area is welcome news for Ireland, because prolonged weakness in the euro area is a key risk to our recovery. Ireland's recovery, while still incomplete, remains firmly on course. The Commission's 4.8% estimate for Irish GDP growth last year is the highest in Europe.

I expect that the European Council will give strong political reinforcement to the key pillars of European Semester 2015, as set out in the Commission's annual growth survey, namely, boosting investment, a renewed commitment to both national and EU level structural reforms, and continued fiscal responsibility.

The speed with which work is progressing on the establishment of the European fund for strategic investments, EFSI, is evidence of the high political priority being afforded to the investment agenda, not only by the Commission but also by member states. I welcome yesterday's statement by finance Ministers on the Council's position on the EFSI, and negotiations with the Parliament should now begin swiftly. The EFSI, through mobilising extra private sector funding, can be expected to directly support and underpin a range of EU strategic priorities, including the infrastructural investments which are crucial to realising energy union. The Government is studying very carefully whether EFSI lending might complement other sources of funding for potential Irish programmes and projects.

The Commission has presented a comprehensive assessment for each member state under the 2015 cycle of the European semester. In Ireland's case, the assessment in the new country report is a broadly positive one, reflecting the strength of the economic recovery under way and highlighting that the recovery is also feeding across to the labour market. The report also points to the decline in public debt, diminishing financial sector challenges and the considerable strengthening of our external accounts, among important positive developments.

The purpose of the country reports, while recognising progress, is deliberately to identify whether further work is needed or where imbalances remain. In Ireland’s case, for example, the Commission points to the need to pay attention to unemployment, particularly long-term unemployment. Job creation, as articulated in the Action Plan for Jobs, is a major priority for the Government.

The Commission also points to the need to ensure that small and medium enterprises can access the finance they need. The Government recently put in place the Strategic Banking Corporation of Ireland specifically to address this challenge. Furthermore, the country report finds that progress is broadly on track in addressing the seven country-specific recommendations provided to Ireland last year.

Importantly, thanks to a streamlining of the semester process, we have a window of more than two months before draft proposals for the next round of country-specific recommendations are produced by the Commission. This window allows for stronger national level engagement with the Commission’s assessment, including by key stakeholders and national parliaments. This should encourage greater national ownership of the semester process. Yesterday, the Minister of State, Deputy Dara Murphy, had a consultation with the Joint Committee on European Union Affairs on issues relating to the semester.

At this point, I do not expect the position in Greece to feature prominently on the European Council agenda, as negotiations continue to be taken forward in the Eurogroup.

Agreement last month on a four-month extension of the Greek programme was a welcome development. I understand that, as of today, technical negotiations are taking place between the institutions and the Greek authorities in Brussels.

Under the external relations heading, the European Council will consider three important foreign policy issues, in particular, relations with Russia and the situation in Ukraine, the forthcoming eastern partnership summit and Libya. The Minister of State, Deputy Murphy, will consider the latter two issues in his wrap-up remarks. This will allow me to focus on Russia and Ukraine.

The specific direction and scope of European Council discussion on EU-Russia relations and the conflict in Ukraine will depend largely on developments on the ground over the coming week. An initial priority will be to review implementation of the 12 February Minsk agreement, which was brokered thanks to the tireless diplomatic efforts of Chancellor Merkel and President Hollande. I believe that the package of measures agreed in Minsk provides the basis for a peaceful settlement of the conflict.

When President Poroshenko addressed the EU Heads of State and Government at our meeting in February, he painted a disturbing picture of the human impact of this conflict, which has claimed over 6,000 lives and forced one million people from their homes. However, thankfully, after a troubled beginning, the ceasefire now appears to have taken hold. While there are some sporadic violations in certain parts of the conflict zone, the overall assessment of the OSCE monitoring mission is that the situation is relatively stable. Prisoner exchanges have taken place since the ceasefire was announced and both sides have begun withdrawing heavy weapons from the front line.

This situation is still fragile. It is crucial that the OSCE monitoring mission is given full and unhindered access to all areas of the conflict zone in order that it can be in a position to verify definitively that weapons have been withdrawn and to where they have been moved. The EU is committed to strengthening the capacity of the OSCE mission to undertake the enhanced monitoring role it has been given under the 12 February agreement.

The question of sanctions against Russia is likely to feature in European Council discussions. President Tusk and his team have engaged in intensive consultations with all member states in recent weeks. Following a video conference with the leaders of France, Germany, Italy, the United Kingdom and the US on 3 March, he said that the leaders had underlined the close linkage between sanctions and the full implementation of the Minsk agreements, and that the EU was ready to decide on further sanctions if the agreements were further violated.

Ireland has consistently supported the dual-track approach adopted by the EU, involving political dialogue and robust, scalable sanctions. Moreover, we attach considerable importance to maintaining the unity and consistency that has characterised the EU response to the crisis to date. This is critical to its influence and effectiveness.

Depending on developments, Heads of State and Government may also consider broader aspects of the Union's important but complex relationship with Russia. This would build on a debate which took place at the Foreign Affairs Council last January. At that meeting, Ministers recognised the advantages of maintaining co-operation with Russia on important global and regional foreign policy issues like Syria, Libya and Iran. However, it was clearly stated then, and it remains the case now, that any reflection on EU relations with Russia should not be interpreted as a return to business as usual, and that any resumption of dialogue with Russia will be selective, gradual and conditional.

I look forward to hearing the comments and perspectives of Deputies. I will report back to the House after the meeting has concluded.

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