I am pleased to have this opportunity to brief the House ahead of the forthcoming informal meeting of the European Council in Brussels on Monday next, 30 January. This informal meeting will take place over a working session on Monday afternoon next.
There will be two issues before us –both of great significance for the Union. Firstly, we will address any outstanding questions on the draft Intergovernmental Treaty; and secondly we will examine what needs to be done to ensure a return to growth and job creation.
Both are important for Ireland, and concrete progress on each is essential. I will be working to ensure an outcome which is
well balanced.
Clearly, a common currency needs common and enforceable rules and a shared commitment to discipline. That is what the new Treaty is about.
But it is also clear that putting in place measures that will help us to avoid future crises, while they may improve market sentiment, will not on their own get us beyond the present crisis. For that we need growth and, to be more specific, we need job-creating growth.
The Government has been very active in advancing Irish positions ahead of the meeting. I spoke this morning with the Austrian Chancellor and will have a number of calls with colleagues, including the Dutch and Italian Prime Ministers, this week. In addition, I will meet with the Danish and Finnish Prime Minister at the World Economic Forum in Davos.
The Tánaiste has also been very engaged with his colleagues ahead of the meeting, and met with a number of them - including his Portuguese, Luxembourg, Dutch, Austrian and Finnish counterparts – at this week’s meeting of the Foreign Affairs Council.
Minister Noonan has been in intensive consultations with his counterparts, including a recent visit to see Minister Schauble in Berlin and a call on the President of the ECB Mr Draghi in Frankfurt today.
In addition, to help drive the growth agenda, the Government has taken a proactive step and co-authored two key inputs to next week’s summit. Our contributions focus on areas which I believe should see a concentration of effort–one on the digital single market, and one on broader single market questions, including advancing the Trade agenda. We have done so in cooperation with a number of like-minded Member States including Sweden, Finland, the Netherlands, the UK and Estonia. I will say more about these in due course.
Draft Intergovernmental Treaty
Before I do so, let me up-date the House on progress on the negotiations on the draft Intergovernmental Treaty.
As I said after the December European Council, it was clear to European leaders at that time that, in spite of the extensive range of measures we have already taken to restore stability and to strengthen coordination, more needed to be done.
To get ahead of the economic and financial crisis for once and for all, and to do so in a convincing manner, we had to act decisively.
We decided both to firm up the stabilisation tools we have put in place to underpin the currency - the firewalls– and to strengthen budgetary discipline by entering into more binding commitments to each other. These new commitments are to be enshrined in the new Treaty now under consideration.
It is in Ireland’s vital national interest that each and every Member State of the Euro Area implements – completely and without delay – the full range of commitments which they have entered into.
It is this element – honouring and implementing the rules – that has not always been achieved in the past, perhaps. But at this stage, we are surely well beyond the point when we can afford to turn a blind eye. We have seen in recent times how vulnerable we all are to a loss of confidence in the ability of one Member State or another to sustain its economy.
And let’s be clear about this, all the hard work we have done to make our way back to a secure position could be undone, through no fault of our own, through the reckless behaviour of others.
Ireland needs to see this new Treaty adopted and enforced. It is absolutely in the national interest to do so, and I reject arguments that fail to recognise that this approach will best serve our interests and bolster our recovery.
Discipline and coordination will be our touchstones in the future. The new Treaty will take implementation of all that has been agreed previously on to a new level. In the past we relied, perhaps too heavily, on peer pressure. We are now giving real muscle to the process. All Member States – big, small, north or south, will have to abide by the rules. The EU institutions will have a key role to play.
Adoption of the Treaty will help to generate confidence, the necessary pre-cursor to investment, growth and jobs, here in Ireland and across the Euro Area and the wider European Union.
That is no small prize, but it is one that this Government is firmly fixed on. It is critical to our national interest.
As the House will be aware, the negotiations are being advanced rapidly. An initial draft of the text was circulated just a week after the December European Council and the following week – Christmas week, when this House was in recess – negotiations started in earnest in Brussels.
Further intensive rounds of negotiations have taken place. As the negotiations have progressed, revised versions of the draft Treaty have been prepared, each of which has sought to capture agreements and understandings reached during the preceding negotiations and, naturally, to bridge differences in instances where they exist between Member States.
This has been a thorough and methodical process, which nonetheless has been undertaken at considerable speed, given the pressing need for this matter to be put in place without delay, in order to instil the maximum degree of confidence at the earliest possible moment.
The latest iteration of the draft Treaty was shared with Member States last Thursday night. Reflecting our desire to engage with Members of this house, the Tánaiste shared the draft and his analysis of the state of play with the Members of the Joint Oireachtas Committee on European Union Affairs last Friday morning. That same draft was the subject of further discussions in Brussels yesterday and today, this time among EU Finance Ministers.
On Friday morning, Ministers attending the General Affairs Council meeting in Brussels will have a breakfast meeting with European Council President Van Rompuy when he will brief them.
Just this morning, it was decided that here will be another round of negotiations at Senior Official level on Friday afternoon next in Brussels, before the final draft is presented to us at the level of Heads of State and Government.
The text will then be taken up at next Monday’s informal meeting of the European Council. We are now approaching the end game. I am hopeful that when EU leaders gather in Brussels we will be able to bring the work to a successful conclusion.
During the course of these negotiations, the Government, assisted by our team of senior officials, drawn from each of the relevant Government Departments and Offices, has been fully engaged with our EU partners, both in Brussels and across EU capitals, in order to ensure that our national concerns in these negotiations are fully appreciated and understood by other Member States.
At each iteration Irish interest has been advanced.
At the same time, we have been active in cultivating alliances with other partners on areas of common concern. This approach has been a productive one.
We have particularly pressed with partners: the need for Ireland’s Programme country status be properly taken into account; the need for an appropriate basis for incorporating a debt brake at national level; the need for a workable application of the ‘structural balances’ methodology; and the need to ensure that as much of the contents of this new Treaty as possible is put on a clear EU legal footing.
In each of the above instances, I am satisfied that the draft text has been moving in the right direction. Of course the negotiations are as yet not concluded and therefore the draft text remains open to further revisions.
A number of issues remain outstanding and some of these may require final decisions to be taken by leaders when we meet next week.
These include arrangements for the Treaty to entre into force and arrangement for participation at Euro Summit meetings by non-eurozone Member States.
These are important considerations. However, as we reflect on the detail, we should not lose sight of why we are pursuing this course at this time.
We are not negotiating a new Treaty for its own sake. We are doing it with a view to making a serious and credible contribution to stabilising our common currency as a means to support a return to sustainable growth, accompanied by job creation. The Government is using all it energies to secure that outcome at next week’s meeting
As I have said many times before, Ireland has nothing to fear and a great deal to gain from this process. That is why we continue to work to ensure our best interests are reflected in the outcome.
We do not want to see the important progress we have made through our own hard work and determination set back in any way. We are working our Programme, meeting our commitments and we want to make a success of it. Anything that makes a positive outcome more likely is to be welcomed, as I believe this new Treaty should be.
Ratification of the New Treaty
I appreciate the great interest the House takes in what will be required in order for Ireland to ratify the new arrangements. At the risk of repeating myself, I can only say that the Attorney General will be asked for a formal view once a final text is available. Until then, it is not possible to say definitively and it is not helpful to speculate.
The test will be whether the proposed Treaty is compatible with the Constitution. The Attorney General will study the legal implications carefully, and will advise accordingly.
As I have stated in this House and elsewhere many times – if a referendum is required, one will be held. Whatever path towards ratification is required, the Oireachtas will, of course, be fully and appropriately involved in the process.
That is without question.
Growth and Jobs
As I said at the outset, discipline on its own will never be enough. I will be working for an outcome that recognises also the urgent need to prioritise steps we can take to encourage and sustain growth.
Because we can be absolutely sure about one thing, without growth Europe will not recover. Without growth, we will not generate jobs.
Growth is the key. It is necessary to restore fiscal balances and market confidence in debt sustainability. And it is the key to supporting job creation and addressing the unemployment crisis, particularly that facing our young people.
And growth will not generate itself. We need to create the right conditions and environment to nurture it across the Union.
That is what is of real importance to our people.
I want real results from next week’s meeting. It is an emphasis I particularly share with colleagues in the Netherlands, the UK, Sweden, Finland and Estonia, and it is reflected in joint contributions with these countries to next Monday’s meeting.
We have co-sponsored two papers which address a number of important issues which serve to advance our national interests. These include:
- priority actions to complete the Single Market, including in particular the significant potential we believe exists in the area of the Digital Single Market;
- further reduction of regulatory burdens on the SME sector;
better targeting of labour market supports, including a new focus on youth unemployment;
- a stronger emphasis on the external dimension of the Single Market and the growth potential of third country trade;
- a more growth-friendly EU budget;
- and a growth-test for future EU proposals.
Europe now has a real opportunity to progress an ambitious package of measures, reflecting the seriousness of our situation.
The Commission’s Annual Growth Survey 2012 was published in November last – marking the starting point of the second European Semester of economic governance.
The key message is that, faced with a deteriorating economic and social situation, more efforts are needed to put Europe back on track and sustain growth and jobs.
Ireland support the five priorities suggested by the Commission:
- pursuing differentiated, growth-friendly fiscal consolidation;
- restoring normal lending to the economy;
- promoting growth and competitiveness for today and tomorrow;
- tackling unemployment and the social consequences of the crisis;
- and modernising public administration.
These are consistent with the Europe 2020 Strategy for growth that is smart, sustainable, and inclusive. And they align well with the national priorities established by our own Programme for Government.
It is clear that we need to deliver better education outcomes; that we need to keep our focus on knowledge-intensive development; and that we need to improve participation and employment rates with sensible and job-friendly labour market policies.
A key challenge in the current environment is to create a climate of confidence for new investment, and to steer this investment in a direction that is sustainable.
Again, we see strong complementarities in this regard between the Europe 2020 Strategy and the Programme for Government.
Countries that, like Ireland, are participating in an EU/IMF programme are not required to prepare a full National Reform Programme and Stability or Convergence Programme for submission in April. This is because the extent of the monitoring and reporting already in place through the regular quarterly reviews is seen as rigorous and largely sufficient.
However, we will nonetheless be preparing a comprehensive review of national progress under the Europe 2020 Strategy for submission, and look forward to engaging constructively with the second European Semester process.
The emphasis of the European Semester on strengthening the alignment between budgetary priorities and structural reforms is the right one. And it is consistent with the direction we have set ourselves here at home.
Conclusion
In conclusion, Ceann Comhairle, I want next Monday’s informal European Council to be a productive one, one which demonstrates the Union’s ability to focus on the urgent and on the important at the same time; that concludes work on the new Treaty and that intensifies efforts to deliver growth as a means to recovery.
I will, of course, report back to the House after the meeting.