Pat Breen (Clare, Fine Gael) | Oireachtas source

I thank those who contributed this debate. As the Taoiseach indicated, I will address in greater detail some of the economic issues for discussion at the European Council meeting.

Leaders will conclude the first phase of European semester 2017 - the Union’s annual cycle of economic policy co-ordination - and will provide guidance to member states for submission in April of their stability programme updates and national reform programmes. The European Central Bank president, Mario Draghi, will join the meeting and there will also be a broader discussion on economic developments.

There is welcome evidence that the EU is on a recovery trajectory, with all member state economies expected to grow this year. The Commission’s winter forecasts, published on 13 February, indicate gross domestic product, GDP, growth of 1.6% for the euro area in 2017, and 1.8% for the EU as a whole. This is still a fragile recovery, with several uncertainties facing us, not least in the geopolitical context. However, the more positive economic outlook continues to slowly feed through to Europe’s labour markets. The emphasis on investment in general is seen as helping to make the recovery sustainable. As stated in the winter forecast, real GDP in the euro area has grown for 15 consecutive quarters, employment is growing at a robust pace, and unemployment continues to fall, although it remains above pre-crisis levels. Measures on youth employment and schemes dedicated to young people appear to be bearing fruit; figures published by the Commission in October indicate that there are 1.4 million fewer young people unemployed in the EU than in 2013. A key risk for Ireland is prolonged weakness in the euro area, so this more positive economic forecast is very welcome. Ireland’s recovery, while still incomplete, remains firmly on course.

I expect that the European Council will give strong political reinforcement to the key pillars of European semester 2017 as set out in the Commission’s annual growth survey: boosting investment; a renewed commitment to both national and EU-level structural reforms; and continued fiscal responsibility.

The proposal on extending and expanding the European Fund for Strategic Investments, EFSI, is evidence of the political prioritisation of the investment agenda by the Commission and member states. The EFSI has directly supported and underpinned a range of strategic priorities, including infrastructural investments. While the impact in Ireland has been modest to date, the Government continues to evaluate where EFSI lending might complement other sources of funding for potential Irish programmes.

The Commission has now presented a comprehensive assessment for each member state under this year’s European semester. In Ireland’s case, the assessment is again broadly positive, reflecting the strength of the economic recovery under way and growing employment. The report also points to the decline in public debt, diminishing financial sector challenges and the considerable strengthening of our external accounts among the important positive developments.

The country report assesses Ireland's economy in light of the Commission’s annual growth survey published on 16 November 2016, which called on member states to redouble their efforts on the three elements of the virtuous triangle of economic policy - boosting investment, pursuing structural reforms and ensuring responsible fiscal policies.

Our country report acknowledges progress but highlights the need to continue to work to resolve legacy issues such as non-performing loans and to remain vigilant to potential external shocks. It finds that progress is broadly on track in addressing the country-specific recommendations provided to Ireland last year. Thanks to a streamlining of the semester process, we now have some time 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, which should in turn encourage greater national ownership of the semester process. I know the Joint Committee on European Union Affairs attaches particular priority to its role in respect of the semester.

In addition to the broader economic recovery and our country report, which are of particular relevance to Ireland, the European Council will address several other items under the heading of jobs, growth and competitiveness. I wish to highlight two of these in particular, namely, trade and the Single Market. Ensuring free and fair trade while showing commitment to a robust trade policy is essential for creating jobs and growth. It is one of the foundations of European prosperity and Ireland will continue to be a strong supporter of free trade in the future. Another foundation stone is the Single Market. Removing barriers has led to economic growth and is clearly in Ireland's interests. Despite all the commitments in this area, the Single Market, particularly the Single Market for services, is still incomplete. We would like to push ahead with a forward-looking agenda, particularly in respect of the digital Single Market, DSM. There have been positive steps on, for example, roaming charges and portability of digital subscriptions but there is still much more to do. Ireland, as exemplified by the Taoiseach's initiative in December, will continue to push for an ambitious approach on the proposals under the DSM strategy. As the Taoiseach has indicated, he will report to the House on these and other issues following the meeting of the European Council.

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