The December meeting of the European Council will take place in Brussels on Thursday and Friday of this week. Economic policy will once again dominate the European Council’s agenda, but at this meeting we will be looking forward to how we can best strengthen our Economic and Monetary Union and in the process provide a stable underpinning for our common currency into the future.
Also under the economic policy heading, leaders will consider the Annual Growth Survey, which marks the beginning of the third European Semester process, which will form an important part of Ireland’s work as Council Presidency during the opening six months of next year.
This meeting will provide opportunity for Heads of State or Government (HoSGs) to adopt a set of conclusions which will lay the groundwork for a substantive debate on the European Union’s Common Security and Defence Policy (CSDP) which will take place in December 2013. These preparations will facilitate a more meaningful discussion among leaders this time next year.
The European Council will likely also adopt a set of conclusions concerning EU Enlargement policy, which will set out the work to be undertaken over the coming year, including during our Presidency. This issue was the subject of detailed and lengthy discussions at the General Affairs Council in Brussels yesterday, at which Ireland was represented by the Tánaiste.
In light of the deliberations of Foreign Ministers, including the Tánaiste, at the Foreign Affairs Council in Brussels on Monday of this week, it is anticipated that leaders will also adopt Conclusions on a number of current foreign policy issues.
Ceann Comhairle,
I should recall for the House that this meeting of the European Council will not follow-up on the discussions which leaders had last month on the Union’s budget over the period 2014 – 2020: the so-called Multiannual Financial Framework. President Van Rompuy, together with President Barroso are continuing their work to identify means of bridging outstanding differences among Member States and we will return to this issue in the New Year.
Economic Policy
Roadmap for the Completion of EMU
Over recent years, as the Union has taken a range of steps necessary to overcome the economic and financial crisis and to bring stability of our shared currency, it has become apparent that the euro needs to be recast on the foundations of a strengthened Economic and Monetary Union (EMU).
These last years have made it crystal clear that the stability and well-being of the euro area and the entire European Union are inextricably linked to the stability and wellbeing of our currency.
Weakness, instability and uncertainty surrounding our common currency have most evidently impacted upon Member States in a markedly adverse manner. It is manifestly the case that a stable euro is in the vital national interests of Ireland. Our economic and financial wellbeing into the future is tightly bound up with the health and stability of the currency that we share with our euro area partners.
A healthy and stable euro is good for Ireland, good for the euro area, and good for the EU.
Ceann Comhairle,
The House will recall that European Council President Van Rompuy was asked by leaders at the European Council in June to develop his thinking on the future of Economic and Monetary Union – in close cooperation with the Presidents of the Commission, ECB and Eurogroup – and to return to us with a “time-bound roadmap for the achievement of a genuine Economic and Monetary Union”.
President Van Rompuy returned to the October European Council with an interim report which certainly pointed us in the right direction – towards making a reality of the undertaking made by leaders in June to break the link between the sovereign and banks, through the establishment of a Single Supervisory Mechanism (SSM) for euro area banks and banking union more broadly; and towards implementation of the various steps we have already taken concerning economic governance, including the six-pack, the two-pack and indeed the Stability Treaty. On the latter, I am happy to report to the House that Ireland will complete the process of ratifying the Stability Treaty later this week with the deposit of our instrument of ratification with the General Secretariat of the Council in Brussels. This last step had awaited the passage of the Fiscal Responsibility Act 2012, which was signed into law at the end of last month. Ireland will thus be among the initial group of twelve euro area Member States whose ratification of the Stability Treaty will trigger its entry into force in due course.
President Van Rompuy’s interim report also flagged the ideas of possible a possible ‘fiscal capacity’ for the euro area as well as possible ‘contracts’ between Member States and the EU Institutions, perhaps covering the Country Specific Recommendations generated as part of the European Semester process.
What we now have on the table to orient and inform our discussions in Brussels later this week on this critical issue is a suite of documents: first, we have President Van Rompuy’s report, which he has prepared in close collaboration with Presidents Barroso, Juncker and Draghi , entitled, “Towards a Genuine Economic and Monetary Union”; second, is the Commission’s “Blueprint for a Deep and Genuine Economic and Monetary Union – Launching a European Debate” which sets the scene for a longer-term discussion; and third, we have a set of draft European Council Conclusions which propose a roadmap for the period up to and beyond 2014.
Each of these three documents has a role to play in this important debate and for that I commend their respective authors for their preparation.
In the draft Conclusions, President Van Rompuy sets out a proposed roadmap spanning three stages, the first of which is for implementation immediately, while the third is envisaged to be rolled out following the European Parliament elections in 2014 and when a new Commission has been appointed.
The first stage, which is intended to run over what remains of this year and next, has a clear focus on implementing what has been already agreed, particularly in the area of banking union.
In this regard, I note that the ECOFIN Council is meeting again in Brussels this evening, in an effort to finalise agreement on the Single Supervisory Mechanism. Such an agreement would take us closer to delivery of our commitment to having the legislative framework in place and I wish them success. The issue is important in itself - including from a national perspective - but it is also an important demonstration of our capacity to deliver what we have agreed.
Implementation is very much the focus of the first stage in President Van Rompuy's Roadmap, and he has my very strong support in this.
Ceann Comhairle,
The second stage proposed in the draft Conclusions would run from 2013 – 2014. It would build on the existing Commission proposals on Resolution and Deposit Guarantees and see the Commission submitting a proposal for a single resolution mechanism authority with an appropriate backstop for those Member States participating. Again, we are strongly in favour of this step which forms a key element of the overall banking union.
In this stage, which is intended to be taken forward in 2013 and 2014, President Van Rompuy is suggesting that Member States enter into what he is calling "arrangements of a contractual nature" to improve implementation of reform. In common with a great number of our EU partners, we have sought greater clarity on this proposal – how such arrangements might work?; on what basis?; and overseen by whom? There is a need for greater explanation and elaboration before we can be sure that such arrangements have a role to play. I look forward to discussing this with colleagues when we meet.
Stage three, which would run from 2014 when there will be a new Parliament and Commission in place, foresees further deepening of economic integration in the euro area and the possible establishment of a “fiscal capacity” which could be used to smooth out shocks and encourage reforms.
As we tease out how such a fiscal capacity might operate - and indeed how it might interact with arrangements of a contractual nature - we will be seeking to ensure that the roadmap as a whole and over time delivers a balanced, consistent and appropriately sequenced range of measures, which will really strengthen EMU and deliver the desired long term stability to our common currency.
The other ingredient as we deliberate on how to strengthen EMU is of course, how we ensure that our people understand what it is we are seeking to do and why and that there is an appreciation that no one is proposing that we strengthen EMU for its own sake – for me and for the Government this exercise is without doubt a means to an end – that end being the long term stability of our currency, our economy and ultimately of our Union.
Improving democratic legitimacy and accountability as we take forward the strengthening of EMU is a prerequisite. Ultimately, how far we go in this regard will naturally depend on how far we intend to take EMU. One complements and accompanies the other. As we move through the stages, as proposed by President Van Rompuy, we need to ensure that accountability structures keep up with developments.
These cannot and must not be considered by anyone to be optional extras. They must be integral to the process of strengthening EMU.
We in Ireland know this better than anyone. Should some of the measures envisaged for stage three require Treaty change, we will need to be able to explain clearly to our people what is proposed and why that would be in the long term interests of this State and the Union as a whole. Strengthened accountability structures concerns decisions to be taken at the European level would be a vital and wholly essential component.
Without doubt there will be a role for the European Parliament, but there must also be a strengthened role for national parliaments – and of course in that regard, for this House. On this, as on other issues, we will need to strike an appropriate balance.
Annual Growth Survey/ European Semester
Ceann Comhairle,
I expect that we will welcome the Annual Growth Survey that was produced by the Commission on 28 November and launches the 2013 European Semester for economic policy coordination.
As Europe slowly emerges from the deepest economic and financial crisis in its history, the Commission is advocating a reinvigorated emphasis on the five priorities identified in last year's survey:
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.
This emphasis is also reflected in the Compact for Growth and Jobs agreed in June, and I expect that it will be strongly supported.
The Annual Growth Survey feeds into national economic and budgetary decisions which Member States will set out in April next in Stability and Convergence Programmes, under the Stability and Growth Pact, and National Reform Programmes, under the Europe 2020 Strategy. These in turn form the basis for the Commission's proposals for country specific recommendations in May.
Effective management of the third European Semester process will be an important focus of next year’s Irish Presidency. The October European Council invited the incoming Presidency to submit a roadmap for the organisation of this work in 2013. This was presented by the Tánaiste to yesterday’s meeting of the General Affairs Council in Brussels and will inform this week’s discussions.
The roadmap essentially sets out in practical terms a response to the key recommendations in the recent synthesis report from the Cypriot Presidency on lessons learned from the 2012 European Semester.
The key objective will be to ensure that all relevant Council formations work in a coordinated and consistent manner towards a thorough preparation of the March and June European Councils.
This will include a strong focus on appropriate streamlining of committee work, building also from the Commission’s proposals for more regular and ongoing dialogue with Member States.
This should support a deeper political discussion within the Council based on shared assessment of common challenges, and a more constructive engagement with the development and implementation of jointly agreed priorities.
Our hope is that country specific issues can, to the greatest extent possible, be settled through stronger bilateral dialogue, and where appropriate through more effective multilateral surveillance within the relevant committees.
We welcome the European Parliament’s efforts to enhance parliamentary involvement. Parliamentary week in January will see debates with members of relevant committees from national parliaments, and I understand that you, Ceann Comhairle, have accepted an invitation to participate as Speaker of the Presidency Parliament – I warmly welcome such engagement. Further ways to reinforce parliamentary involvement are also being explored.
Common Security and Defence Policy
The European Council is also expected to adopt conclusions on the EU’s Common Security and Defence Policy (CSDP). The conclusions will cover CSDP Missions, capabilities and preparations for a discussion on Defence issues at the European Council in December 2013. Leaders are expected to task the High Representative and relevant EU bodies to develop further proposals and actions aimed at strengthening CSDP and improving the availability of military capabilities and to report on these initiatives by September 2013. The issues to be covered in the report will include: increasing the effectiveness, visibility and impact of CSDP; enhancing the development of defence capabilities; and strengthening Europe’s defence industry.
This item will be essentially of a preparatory nature at this week’s meeting.
Enlargement
The European Council will endorse the conclusions on Enlargement agreed at the General Affairs Council yesterday. Given that these Conclusions have now been agreed, there is not expected to be a lengthy discussion at the European Council. There were no specific decisions made which would require agreement at European Council level. However, the conclusions will shape the agenda over the six months of Ireland’s Presidency and it is likely that we will have to consider such issues as granting candidate status to Albania and opening negotiations with Serbia, and possibly Macedonia, during that time.
In particular it is planned that the Council will review progress on the Belgrade-Pristina Dialogue in the spring with a view to considering whether to open accession negotiations with Serbia and whether to open negotiations for a Stabilisation and Association Agreement between the EU and Kosovo. We also expect to consider a report from the Commission on Albania’s progress in meeting various reforms with a view to deciding on whether to grant candidate status.
The Council will also examine progress made by the Former Yugoslav Republic of Macedonia on reforms and on the name issue and will consider the possibility of opening accession negotiations.
We welcomed the reference in the conclusions to regaining the momentum in the accession negotiations with Turkey, which we would hope to be able to make progress on in the next six months. We also intend to advance the accession negotiations with Iceland and Montenegro. Ireland will oversee consideration of the final monitoring report on Croatia’s preparations for accession, and we look forward to welcoming Croatia as the 28th member of the Union on 1 July.
Foreign Policy
It is expected that the European Council will also adopt short conclusions on Foreign Policy issues. These will draw on the conclusions which emerged from the Foreign Affairs Council earlier this week, at which the Tánaiste represented Ireland. Discussions at the Foreign Affairs Council focused principally on developments in the Middle East and Syria.