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

On 28 and 29 June, I will attend a meeting of the European Council in Brussels. I will also attend a meeting of the European Council in its Article 50 format and a eurozone summit. The meeting of the European Council proper on Thursday will focus on security and defence, migration, jobs, growth and competitiveness, innovation and digital issues, the multi-annual financial framework, and external relations. It is a heavy agenda. On Friday morning, we will meet in Article 50 format to discuss the Brexit negotiations. After that, there will be a Euro summit that will focus on the deepening of economic and monetary union. I will focus my remarks on Brexit and on some of the other issues of particular significance for Ireland. The Minister of State, Deputy McEntee, will speak about the other European Council issues in greater detail in her statement.

Our discussions on Brexit on Friday morning will be based on an assessment from Mr. Michel Barnier on progress since the March European Council. He will report that there has been some progress on elements of the legal text of the withdrawal agreement, including on areas such as VAT, EURATOM and certificates for goods. He will also make it clear that serious divergences remain on Irish issues, regarding which there has been no substantial progress since March.

The UK entered into commitments in December. It agreed that the withdrawal agreement will set out the legal terms on which it will leave the EU. It agreed that it must contain a legally operative backstop to avoid a hard border on this island. This commitment was restated in writing in March. On 7 June, the UK presented a technical paper on a temporary customs arrangement between it and the EU. It has suggested that this arrangement would apply after the proposed period of transition if it were needed to avoid a hard Border on the island of Ireland. While it is positive that there is now a written proposal from the British Government, the paper itself acknowledges that an arrangement for customs is only part of the solution. Arrangements on regulatory alignment will also be required. Furthermore, the proposal had fundamental shortcomings, including the suggestion that the arrangement could be time limited. Having studied the paper, the Commission has identified numerous issues regarding the proposal's legal and technical viability, and its fundamental incompatibility with the integrity of the Single Market and the customs union.

In presenting his views on the state of play in the negotiations, the Union's negotiator has said that the UK must deliver on its commitments in full. The withdrawal agreement must contain a fully operational backstop for Ireland and Northern Ireland. He has stated his belief that a lot more work needs to be done if there is to be an agreement by October.

When the Tánaiste and I met with the European Commission President, Mr. Jean Claude Juncker, and Mr. Michel Barnier last Thursday, we were all in complete agreement in our assessment that serious divergences persist. As I said in my remarks after the meeting – and I put it bluntly – there is not much time left if we are to conclude an agreement in October and have it ratified by the European Parliament and UK Parliament in time for the UK's departure in March. The Irish Government and the Union's negotiators have said that there is an urgent need to intensify efforts and negotiations. We should all be in no doubt that, without a backstop, there will be no withdrawal agreement and that without a withdrawal agreement there will be no period of transition for the UK. As a result, the choice for it is stark. That is what I will be saying when I update European Council colleagues this week. I expect that the European Council will send a message to the UK. Negotiations on the withdrawal agreement can only progress as long as all commitments undertaken so far are respected in full.

The Government hopes that it will also be possible to set out in detail the framework for the future relationship between the EU and the UK alongside the withdrawal agreement. As we have always said, we hope that this can be as close and comprehensive as possible, and we hope that it will remove any need for a hard border, not just between the North and South but also between the east and west. However, it will not in any way remove the need for a legally robust backstop to apply unless and until better arrangements enter into force, ensuring that there will never be a hard border on this island, whatever circumstances prevail.

In the draft protocol on Ireland and Northern Ireland, the EU has put its version of a viable backstop on the table. It is entirely in line with the agreement reached between the EU and the UK last December. The UK acknowledges now that it needs to engage fully on this text.

Our EU partners remain steadfast in their support of Ireland, something for which we are profoundly grateful. At our meeting in Dublin on Thursday last, President Juncker reiterated that the EU is fully behind Ireland in the negotiations and that this will not change. That message was also clear in my telephone conversation with President Tusk last Thursday. Our partners are absolutely determined to avoid any situation in which Ireland would be isolated. Indeed, Ireland's concerns are at the very heart of the negotiations. Ireland's interests are seen and felt as EU interests, as President Juncker said.

Irish issues are not the only ones that remain outstanding. Other very important issues remain open, including, crucially, the governance of the withdrawal agreement, and the role of the European Court of Justice, ECJ. Now there will have to be renewed and intensified efforts to resolve all the outstanding issues, including the backstop. Work should also be accelerated on the framework for the future relationship between the EU and UK. Here, again, the UK needs to provide written proposals if we are to make progress. While I am hopeful that we will achieve a close, comprehensive and ambitious future relationship with the UK, the Government is, of course, continuing to plan for the full range of scenarios. I expect that the European Council will urge all member states to do likewise at its meeting this week.

Turning to other issues, migration continues to be a priority concern for the Union, and we will exchange views on the progress achieved to date in our comprehensive response to mass migration and on our plans for the future.

While there has been some progress on overall EU policies, it is no secret that there are differences of opinion between member states, particularly on to how to manage the issue internally. A breakthrough at the European Council is not impossible but it is considered very unlikely at this stage.

Ireland has sought to play a constructive role in discussions on migration and to be an active and pragmatic partner. We opted in to the EU relocation and resettlement measures in 2015 and we provided a series of fully crewed naval vessels to assist with humanitarian search-and-rescue efforts in the Mediterranean. We have substantially increased our humanitarian assistance to relevant regions. We should continue to play an active and constructive role on this issue. It is an issue that is too big for individual nation states and that can only be solved collectively.

We need to strengthen the Union's external borders. We also need to work actively with partners, including in Africa, to drive political and economic development so people can have security, good governance and economic opportunities. Finally, we need to find a means to respond to the question internally, in a spirit of fairness and solidarity.

Under the heading of jobs, growth and competitiveness, we will discuss the country-specific recommendations, digital taxation and trade. We had a useful exchange on digital taxation at our leaders' agenda meeting in March and, as agreed at the time, conclusions on the issue will now be adopted.

It is important to stress that Ireland is fully committed to global tax reform. We do not accept that companies should pay little or no tax on their profits. This, however, is a global issue, which therefore requires a global solution. We need to ensure that tax is paid by companies where value is created, not simply where a transaction happens. Unilateral EU action on this basis would damage EU competitiveness and disadvantage smaller member states and exporters.

The Commission has recommended a short-term temporary tax on certain limited digital tax activities in advance of more extensive taxation measures in the future. Along with several other EU member states, we have urged caution around any short-term measure. We need solutions that are workable and sustainable in the long term. I believe strongly that the OECD is the best forum for making progress on this because it needs the widest possible international consensus. We will, of course, continue to engage constructively with the EU, in addition to the OECD, in the period ahead.

On trade, I strongly oppose the US Administration's decision to apply tariffs on steel and aluminium. These are not justifiable on the grounds of national security. I fully support the Commission's approach of proportionate rebalancing and safeguarding measures, along with legal proceedings at the World Trade Organization, WTO.

We also need to maintain a positive trade agenda at the European Council, however. I expect the European Council to call for the Union to continue to negotiate ambitious, balanced and mutually beneficial trade agreements with partners across the world, including Australia, New Zealand, Mexico and Latin America. This is something that I welcome and that is very much in Ireland's interests.

On security and defence, which comprise another priority for many partners, we will examine many areas, including permanent structured co-operation, PESCO, military mobility, the European Defence Fund, the defence industrial development programme and co-operation with NATO, as well as work undertaken to strengthen civilian Common Security and Defence Policy.

Partners are respectful of Ireland’s traditional policy of military neutrality in these discussions. We are founding members of PESCO and support greater EU-NATO co-operation where it contributes to international peace and security. This ensures better coherence and effectiveness on the ground in peace support and crisis management operations.

The euro summit meeting on Friday morning will take place in its inclusive format, that is, with all 27 member states and will focus on economic and monetary union, EMU. The main issues will relate to banking union, the European Stability Mechanism, ESM, and proposals for establishing a budget for the eurozone. From Ireland’s perspective, we support the completion of a banking union as soon as practicable with appropriate risk reduction and risk-sharing measures. We can support the ESM as the backstop to the Single Resolution Fund. I expect agreement on this will be difficult, however.

I note the interest in establishing a budget for the eurozone. The intention is to task finance Ministers to examine the proposals carefully with a view to returning to these matters at the December European Council. One would have to know whether a eurozone budget would require additional contributions from Irish taxpayers, how much and what taxes, where will it come from, how much would it be, how it would be spent and whether it would be compatible for the eurozone and the EU to have separate budgets. These issues need to be teased out clearly. We need to have those questions answered before we can commit to supporting it.

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