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

On Thursday, 23 April, I joined other members of the European Council by video conference to discuss the coronavirus emergency and to chart a path towards economic and social recovery. This is the fourth such meeting, with previous meetings having taken place on 10, 17 and 26 March. I welcome the opportunity to provide an account of these meetings to the Dáil and to exchange views and ideas with Members.

Sadly, when this emergency started, the level of co-ordination across the European Union was poor. Member states did their own thing, very often because they were responding to a pandemic that was happening at a different pace in different countries, and, of course, as we all know, public health is a national, not a European, competence. At its best, the European Union stands for freedom, peace and solidarity and a belief that we can achieve something greater by acting together as a continent. Europe showed what these values meant recently during the first phase of the Brexit negotiations and now must do so again during this pandemic. We must have a co-ordinated response based on solidarity and demonstrate that the European ideal shines brightest when things are at their darkest.

In our meetings, the European Council has focused on five strategic areas of work where we believe co-operation is essential: first, limiting the spread of the virus; second, ensuring the supply of medicines, equipment and goods; third, supporting research; fourth, alleviating the socio-economic consequences for our people; and fifth, co-operating to bring citizens home from other countries. At our meeting of 23 April, we welcomed, in particular, the joint European roadmap towards the lifting of Covid-19 containment measures, which was published by the Commission on 15 April. It sets out a principles-based and science-led approach to reopening our societies and economies. This was widely welcomed and aligns with the approach we have taken as a Government to date.

Across Europe, our first responsibility - and our highest responsibility - has been to protect the lives and health of our citizens. We see this in the Commission's work on a shared procurement framework for personal protective equipment, PPE, and other medical supplies, EU research funding for the development of effective diagnostics and therapeutics, as well as a co-ordinated approach to working towards an effective vaccine for SARS-CoV-2. I welcome that the European Commission is building a strategic stockpile of medical equipment from which member states will be able to draw in the future and, indeed, in the near present. In fact, batches of FFP2 protective masks were distributed from this stock in recent days to Spain, Italy and Croatia.

There is more to do and we need to consider how to make the European Union more resilient and more responsive as we chart our way through and beyond this crisis. At our first meeting, we agreed to co-ordinate the repatriation of our citizens stranded across the globe as a result of the pandemic.

To date, repatriation efforts have brought more than 500,000 EU citizens back to their home countries. These include people repatriated to Ireland on special flights we chartered from Peru and India, on which citizens of 17 other countries also travelled. We have availed of the reverse from other countries.

On 17 March, we agreed that we would do whatever it takes to meet the current challenges, to restore confidence and to support a rapid recovery. We invited the Eurogroup of EU finance Ministers to scrutinise economic and financial developments and adopt a co-ordinated policy approach. The president of the European Central Bank, Madame Christine Lagarde, has participated in each of these meetings and she strongly supported our position that we need to provide monetary flexibilities to protect the European economy, at least in the initial stages of this economic crisis. The crisis has had deep and sharp economic and social impacts of which everyone in the House will be well aware. We have already seen the stresses and strains across all countries of the European Union and some more than others have been particularly affected.

At the meeting on 26 March, we discussed how we can best respond to this crisis collectively. Together, we must deal with the immediate issues arising and drive our recovery into the medium and longer term and ensure that it is sustainable. Prior to that meeting, I joined eight of my colleagues in advancing an approach that would have led to the mutualisation of debt, known in shorthand as corona bonds. The idea was to take a shared approach to managing debt arising solely from this crisis. This could be spending directed towards our health services or wider spending that governments have to undertake to protect their welfare states and refloat their economies. Such an approach would have required a legal underpinning not currently provided for in the European treaties and I accept that it would have taken a long time to agree this, even longer if it had to be approved in all member states and longer still if some, including Ireland, required referendums. However, it was still worth exploring. In the absence of unanimous support for this approach, we agreed that alternative solutions for a recovery fund should be developed.

I am supportive of the broad suite of measures taken at EU level. These include a temporary relaxation of the state aid rules under which Ireland has two aid packages, totalling €400 million and approved by the Commission, to assist our most affected companies. However, we need to ensure that member states do not use state aid to give an unfair advantage to companies based in member states with which they competed. This will be monitored closely. We have also invoked the escape clause in the Stability and Growth Pact in order to give member states additional flexibility to spend and borrow more in response to this crisis. We all appreciate that this cannot go on forever but it is appropriate that we do so at this particular point in the cycle. The European Central Bank has also played an important role in ensuring stability in the midst of this extraordinary crisis, including through its €750 billion pandemic emergency purchase programme. Capital rules for banks have also been eased to ensure that they can lend into the real economy, providing liquidity to businesses under pressure.

At the meeting on 23 April, we endorsed an economic package agreed by the Eurogroup worth up to €500 billion, and we asked that it be operational in the first week in June. The package contains three elements: a €100 billion EU SURE instrument, which will provide financial assistance in the form of loans granted on favourable terms to cover initiatives such as short-term work schemes and similar measures for the self-employed - this would include, for example, our temporary wage subsidy scheme; a €200 billion EIB Covid-19 guarantee fund for crisis lending to SMEs, mid-cap businesses and corporates, underpinned by €25 billion in member state guarantees; and a €240 billion ESM-operated pandemic crisis support instrument to provide a backstop for member states to make available sovereign funding of up to 2% of GDP for direct and indirect health care expenditures. It should be noted that these are all loans and guarantees and not grants, and borrowed money must be repaid. Taken together, these measures represent an EU fiscal response of over €500 billion - an historic level of deployment of resources to respond to an emergency that is unprecedented. This is a much greater and more appropriate response from the European Union than during the financial crisis ten or 12 years ago, when it acted in a way that was too little and too late.

Looking beyond the immediate crisis, we agreed the need to put in place a recovery fund to rebuild our economies, reopen our businesses and get our citizens back to work. We also welcomed the joint roadmap for recovery and asked the Presidents of the European Commission and Council to bring it forward. It also sets out a framework for collective action towards recovery, including a fully functioning Single Market, an unparalleled investment effort and a commitment to the EU playing its part in driving a global recovery.

As a necessary next step to this work, we welcome the European Commission's proposal that it undertake a sector-by-sector analysis of the economic impact of the crisis to identify and target supports necessary for recovery in those particular sectors. We also agreed that climate action and the digital economy should be critical components of this recovery plan. This crisis has dealt a terrible shock to our economies but also creates an opportunity to make sure that the European-wide recovery is climate-proofed and technology-driven. I believe the EU budget, the Multiannual Financial Framework, is the most obvious vehicle for doing this, so we have asked the Commission to look again at the MFF proposal and to consider how it and the recovery fund should be linked.

As is well known, there are strongly held different views around the table on how this should be financed. Some believe there should be transfers from other countries to those countries most affected in the form of grants - generally speaking, a transfer from north to south. Others expressed the view that loans were the only acceptable option to their citizens and also the legal order of their nations and their constitutions. I articulated the view that both could play a part and that the right balance between loans and grants is what we should aim for. I also argued that I could not accept any approach that deployed the MFF to the detriment of proper funding of the Common Agricultural Policy, CAP. Farming, agribusiness and the food sector were already facing great challenges and have been deeply affected by this crisis. Successful and well-functioning programmes, such as CAP, cohesion and Horizon, will help to drive our recovery and, therefore, should be funded properly for the next seven years. At this time of crisis, we see the strategic importance of a strong agrifood sector providing European citizens with food security and affordable food. CAP is needed now, more than ever, perhaps as much as it is was needed when it was first invented.

During this emergency, we have seen huge stresses on the Single Market as some internal borders closed to people, goods and services, albeit temporarily. As was predictable, countries that closed their borders and introduced export bans had to reverse them within weeks, when they learned very quickly that the benefits were less than the costs. I believe a fully functioning Single Market and free trade beyond our borders will be necessary as we recover from the recession induced by Covid-19. In the wrap-up statement, the Minister of State, Deputy McEntee, will discuss the package of measures being taken at EU level to support partner countries globally. As part of the Union's global effort, more than €3.3 billion of EU financial support has been mobilised for the western Balkans for Covid-19 and the post-pandemic recovery. This is our neighbourhood and it is the right thing that we should help them. Later this afternoon, I will participate in a western Balkans summit with EU leaders and Heads of Government from the western Balkan states. This will also be done by video conference, so I apologise that I have to leave this session early to take part in that.

On Saturday, we mark Europe Day. I believe this date should serve as a reminder of what we have achieved together. The EU is held together by its values - respect for democracy, the rule of law, individual freedom, equality before the law, our unique model which is the social market economy and the four freedoms. It should also remind us that so many of the problems and challenges we face do not recognise borders drawn my mankind. Whether it is health emergencies like pandemics, environmental emergencies like climate change, security threats like international terrorism or global economic movements, the pooling of resources, the creation of safety nets and the adoption of collective measures are necessary to drive our recovery.

This is particularly important for small countries such as Ireland, with a population of only 5 million. Our best hope for the future lies in working together, being at that top table in the European Union and making sure we are at the heart of the common European home we helped to build. I welcome the views and thoughts of Members today.

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