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

This proposal was informed by a series of bilateral meetings he held with leaders in the preceding weeks. I discussed Irish interests and concerns with him on 12 February. It also built on extensive consultations at official level.

As the House will be aware, the Commission published its proposal for the next MFF in May 2018. This proposed an overall level of 1.11% EU 27 GNI.

Sectoral proposals covering 37 EU funding programmes were also presented by the Commission.

Negotiations intensified in the latter half of last year under the Finnish Presidency. These discussions revealed marked differences between member states. Some considered the level of spending proposed by the Commission as too high, including a group strongly of the view that spending should be kept to no more than 1% GNI. Others believed that continuing to support existing successful programmes, while also equipping ourselves to meet new challenges, required a higher ceiling and a bigger budget. The European Parliament, which must give its consent to the new budget, shares the view that a larger budget is required.

For our part, the Government has always stated that we are open to increased contributions, once existing policies such as the Common Agricultural Policy, CAP, are properly resourced and added European value is demonstrated.

The Finnish Presidency proposal ahead of the December Council set out a ceiling of 1.07% GNI. In his revised negotiating box, President Michel proposed 1.074% EU GNI, or some €1.095 trillion.

As Deputies will appreciate, these negotiations are broad and cover many areas of EU policy. Each member state has its own particular areas of interest and priorities. As with all budget discussions, especially those involving 27 member states, it takes time and effort to bring positions closer together, and to find a compromise on which everyone agrees.

The negotiating box sets out proposed funding across seven major headings. These include the Single Market, innovation and digital; cohesion and values; natural resources and environment, including CAP; and neighbourhood and the world.

Reflecting the importance of tackling climate change the budget aims to mainstream climate action and to achieve an overall target of at least 25% of expenditure having a climate focus. A new just transition fund is proposed to deal with the social and economic consequences of far-reaching climate action and achieving climate neutrality by 2050. This fund will be open to all member states and I welcome the inclusion of the Irish midlands and other peatlands within its scope.

President Michel also aims to increase the capital available to the European Investment Bank to mobilise up to €500 billion of additional investment for climate change, green energy and other actions. There is also a strong PEACE PLUS allocation which will deliver a significant and much-needed cross-border programme.

While the latest proposal shows an increase for CAP compared with the original Commission proposal, it does not go far enough. I raised this point with President Michel when I met him in Brussels. In this meeting, I set out Ireland’s well-established position on the need to protect CAP as an important, long-standing and well-functioning policy, and one of vital assistance to our rural communities, the rural economy and farming families.

I also set out the many challenges facing our farming sector, including Brexit and pressures and prices in the beef sector. I expressed my strong view that we cannot ask farmers to do more on climate, sustainability, animal welfare and food security while accepting less funding at the same time. I was unambiguous that this position has widespread support in Ireland across all parties.

For his part, President Michel has on many occasions expressed the view that as a result of the departure of the United Kingdom, a significant net contributor to the budget, there is a gap in EU funding that needs to be filled. As a result, member states can expect to be contributing more while receiving less. Reaching agreement on such a proposition was always going to be a very difficult task and so it proved. Those who pay most into the budget have concerns about the overall size of the budget, with others sharing our concerns about possible funding cuts to priority programmes.

Due to rapid economic growth our annual contributions have grown significantly in recent years. The Department of Finance estimates that our gross annual contribution will increase further in the years ahead. Our economic success cannot be decoupled from our membership of the EU. As a large recipient of EU funding over many years, we got a leg up when we needed it most. As a small trading nation on the periphery of Europe, our economy has also benefited greatly as a full and committed member of the Single Market, the benefits of which dwarf the amounts being discussed in the negotiations.

It is significant that last week’s discussion of a new budget comes at a time of change and reflection within the EU. In addition to the departure of the UK, in May last year a new European Parliament was elected, and a new European Commission under the Presidency of Ursula von der Leyen took office in December.

Work is under way to prepare for a conference on the future of the EU. Irish people are strongly supportive of our membership of the EU. We want one built on values, and this perspective is very much reflected in the strategic agenda agreed by the European Council last June. This focuses on protecting citizens and freedoms; developing a strong and vibrant economic base; building a climate-neutral, green, fair and social Europe; and promoting European interests and values on the global stage.

Ireland’s input was informed by a series of citizens' dialogues on the future of Europe led by the Minister of State, Deputy McEntee. These significant conversations, held across the country, were about what Europe means to our citizens and what they want it to mean in the future.

In recent times we in Ireland have seen at first hand the value of European unity. The EU is a union of nations as well as of peoples, in which small states are protected and respected. While we should not neglect the costs of EU membership, we must also reflect on the benefits and advantages it confers on members.

Investments made through the multi-annual financial framework, MFF, are vital for delivering European added value and for furthering the European ideals of solidarity, partnership and co-operation. It is important that the MFF is appropriately funded to meet the challenges faced by the European Union.

In addition to discussing the MFF, last week’s European Council also agreed a declaration on the situation in Idlib in light of the renewed military offensive by the Syrian regime and its backers. We called on all actors to cease hostilities, to respect fully their obligations under international humanitarian law and international human rights law, and to allow unimpeded and direct humanitarian access to all those in need. The Tánaiste will provide further detail on developments in Syria in his statement.

While agreement on the MFF was not possible on this occasion, I expect the European Council to return to the matter in the weeks and months ahead. The next regular meeting will take place later this month, on 26 and 27 March. The agenda for the March European Council typically includes an economic element, and the provisional agenda provides for a discussion on strengthening our economic base. It is also proposed to discuss digital issues. Leaders will also discuss enlargement again, having agreed in October to revert to this subject before the EU-Western Balkans summit, which will take place in Zagreb in May. As ever, leaders will take the opportunity to discuss external relations and other topical issues. I anticipate we will have the opportunity for a pre-European Council debate here in the House, and further detail can be provided on that occasion.

When it comes to European matters there has always been a large degree of consensus in the Oireachtas and support for the Government of the day. While a new Government is being formed, however long that may take, the current Government will continue to represent Irish interests in Europe and make the case for what we believe is better for Europe as a whole.

I welcome the views of other leaders today and in the days and weeks ahead, which will inform our approach in these negotiations. Our strength during the first phase of Brexit was the unity we enjoyed and built up with fellow member states and the unity we saw at home. I believe the same approach will be our strength as we begin the second phase of Brexit and it will ensure the Irish position is strongly articulated during the negotiations over the seven-year budget.

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