Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I will participate with my EU counterparts in a series of European Council meetings in Brussels tomorrow and Friday, 22 and 23 March. Before setting out the discussions expected at those meetings, I would like to say that I met Chancellor Merkel yesterday in Berlin. This was an important part of my ongoing programme of bilateral engagement with other EU Heads of State and Government, which has also included recent meetings in Dublin with Prime Minister Bettel of Luxembourg and the President of the European Council, Donald Tusk. All these meetings were particularly useful in advance of discussions at the European Council. My meeting with Chancellor Merkel was positive and constructive. We noted our very positive bilateral relations. We discussed a range of issues on the European Council agenda, including Brexit, trade between the EU and the United States and the tax challenges that arise from the digitisation of our economies. I also took the opportunity to congratulate the Chancellor on her election to office for the fourth time and to thank her again for her strong support and solidarity with Ireland. Both in her comments at the meeting and at the press conference afterwards, she was pleased to reiterate that support and to assure me that it remains "unconditional", to use her words.

The European Council will meet in several formats over the course of Thursday and Friday. The main meeting tomorrow will focus on jobs, growth and competitiveness as well as external relations. In the evening, we will continue our leaders' agenda discussions as part of the debate on the future of Europe, with the focus this time on digital taxation. On Friday morning, we will meet in Article 50 format, without the UK, to discuss progress in the Brexit negotiations, followed by a euro summit at which we will consider how we can further and improve economic and monetary union.

On Thursday we will discuss and adopt conclusions on jobs, growth, and competitiveness, including the Single Market, the European semester, social issues and trade. We will also discuss external relations, including Turkey and the western Balkans. The Minister of State with responsibility for European affairs, Deputy McEntee, will say more about these in her remarks. The Prime Minister of the United Kingdom, Mrs. May, will also speak about the nerve gas attack in Salisbury on 4 March. This was a reprehensible and loathsome attack and we stand in solidarity with the UK. We condemn unequivocally the use of chemical weapons and assassinations wherever they happen and whoever commits them.

As Deputies are aware, the leaders' agenda discussions are intended to facilitate an open and free-flowing exchange of views on the future of Europe. These meetings are not supposed to produce conclusions but rather to unlock some of the more contentious aspects of issues on the EU agenda and to allow each of us to understand the others' positions a bit better. We have met in this format on three occasions when we discussed educational and cultural co-operation - that was in Sweden - migration, institutional reform and the multi-annual financial framework. The main focus tomorrow will be on digital taxation, an issue of broad international interest given the significant profits generated by multinational companies. It is important to emphasise that Ireland is committed to global tax reform. I restate that we do not accept that companies, including large digital ones, should pay little or no tax on their profits. Companies should pay their tax in full where it is owed and on time. However, we are very much of the view that global solutions are needed to ensure that tax is paid by companies where value is created and profits are generated, reflecting the highly international nature of the digital economy underpinned by the World Wide Web. Given the enormous complexity of the issues involved and the risk of unintended consequence should Europe act unilaterally and therefore hand an advantage to countries that are not members of the European Union, I will strongly argue that the EU should wait for the OECD to complete its work before deciding on how to act, and should only do so in the context of agreement on an international level. In saying this, I am very mindful of the interim report published by the OECD task force on the digital economy on Monday which highlights very well the potential risks attaching to a rushed short-term or interim measure. As the Secretary General of the OECD, Ángel Gurría, said, this is too important an issue to be rushed.

As the House may be aware, the Commission published a set of proposals today which recommend a short-term temporary levy on certain digital activities, in advance of more extensive taxation measures in the future. I will be making clear my views that any such measure would be ill-judged for the reasons I have set out, and also because it would be likely to disadvantage smaller member states. We will, of course, continue to engage constructively within the EU and with the OECD in the period ahead. On trade, I expect that the Commission will brief us on discussions that have taken place this week on the United States' proposed tariffs on steel and aluminium.

On Friday morning, the 19 eurozone members will meet for a euro summit. The President of the ECB, Mario Draghi, and the eurogroup will be present. The focus will be on the economic and monetary union, EMU. This follows the euro summit in December when we tasked finance ministers to examine a series of issues around the European Stability Mechanism, ESM, and proposals to develop it into a European monetary fund, the banking union and fiscal policy considerations among others. As a contribution to that important debate, the Minister for Finance, Deputy Donohoe, and his counterparts from seven EU member states published a joint paper on economic and monetary union, EMU, on 6 March. This set out a number of common values and ideas with the aim of building a stronger economic and monetary union. We do not expect that any decisions on this will be taken on this before June at the earliest.

Finally, we will meet in Article 50 format to discuss the Brexit negotiations. As Deputies are well aware, this is an important moment in the Article 50 negotiations and it is hoped that we can agree guidelines on the future relationship between the EU and the UK. Last December, after difficult negotiations, the European Council agreed that sufficient progress had been made on the phase one withdrawal issues to allow the talks to proceed to this next phase. On this basis, work began on drafting the withdrawal agreement The first draft was published by the European Commission on 28 February. This text, which will be legally binding, reflects the principles and commitments agreed in phase one, including those on protecting the Good Friday Agreement in all its parts, gains of the peace process, avoiding a hard border, and how this will be achieved. These have been set out in a dedicated protocol on Ireland and Northern Ireland, which is attached to the draft withdrawal agreement and has the same full legal effect. After intensive negotiations between the Commission task force and the UK over the past week, there has been good progress on some parts of the withdrawal agreement, including on citizens' rights, the financial settlement, and transition. Having a period of transition is important for public services, citizens and businesses to enable them to prepare for any permanent changes that may take place from 2021 onwards.

I am pleased that there is now broad agreement on these terms, subject to final approval, that the status quowill apply until the end of the transition period on 31 December 2020. Regarding the protocol, I am pleased that the UK has now agreed that the backstop solution to avoid a hard Border proposed in December will form part of the legal text and that all the issues identified by the EU side in the draft will be addressed to deliver a legally sound solution to avoid a hard Border on our island. Prime Minister May confirmed this in a letter to President Tusk on Monday. As I have said before, and as Michel Barnier, the chief negotiator on behalf of the EU27, repeated on Monday, the backstop will apply unless and until another solution is found. So we look forward to receiving and considering the UK's detailed proposals in the coming weeks. Of course, it is fully accepted by Michel Barnier, the task force, the UK and our EU partners that nothing is agreed until everything is agreed. We will continue to work very closely with them in the period ahead.

On the future relationship between the EU and the UK and based on the UK's stated positions, the draft guidelines for consideration by the European Council propose a free trade agreement. This, of course, would not strengthen the current economic relationship between the EU and the UK but it is an inevitable consequence of the red lines set out by Prime Minister May in her speech on 2 March, which are that the UK will leave the Single Market, the customs union and the jurisdiction of the European Court of Justice. However, I welcome the assurance in the draft guidelines that the Union will enter negotiations on the future relationship with the UK with an open, positive and constructive mind. This is very important should the UK Government's position evolve further and red lines soften in the months ahead.

We fully support and share the EU's view that any future agreement must have the correct balance of rights and obligations and that the integrity of the Single Market must be protected. This is very much in Ireland's interest as membership of the Single Market and its integrity are core elements of our economic policy. I hope that we can agree on Friday to open detailed discussions with the UK on the future relationship. At the same time, our British friends must fully engage on the draft withdrawal agreement, including the protocol on Ireland and Northern Ireland. To that end, we have agreed on an intensive schedule of meetings starting next week. They will happen in Brussels and will involve the UK and Ireland.

Cuireann an Comhairle Eorpach ceannaireacht thábhachtach ar fáil chun na dúshláin roinnte a réitiú. Táim ag tnúth le bheith ag dul i ngleic le mo chomhghleacaithe timpeall an bhoird. Beidh m'intinn fós á choinneáil agam ar na suimeanna is fearr don tír seo agus don Eoraip. Beidh mé ag tabhairt tuairisc ar ais chuig an Teach ar an 28 Márta ar thoradh an Chomhairle Eorpach seo agus na cruinnithe atá bainteach leis.

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