Dáil Éireann, 6 February 2013
The European Council will have its first meeting of 2013 in Brussels on Thursday and Friday of this week.
MFF
The main issue for discussion is agreement on the Union’s future budget, the MFF. We will start our work tomorrow, and I expect discussions to continue into the night.
As the House will recall, negotiations on the MFF have been underway since the European Commission put forward proposals in June of 2011. They have been, and remain, both highly technically complex and highly political - by assigning our resources, we are effectively prioritising our common actions, making hard choices and difficult decisions on the EU’s actions right up to 2020.
The amounts of money involved may indeed sound very large – the Commission originally proposed expenditure of about one thousand billion euro over seven years. However, in reality, for an EU of 560 million citizens, this actually represents just 1% of EU GNI. Or put another way, it represents just 2% of total public expenditure in the EU. At a time when we look to the Union to assume many more tasks this seems indeed modest.
But the negotiations this week are not only focused on spending, they also concern how we raise this money – how the EU assembles the money that it needs; how we can improve the quality of the spending; and how rebates may be handled for individual Member States.
And this must all be agreed by unanimity. We are a Union of 27, soon to be 28 Member States. Each Member State has its own appreciation of the Union’s wider interest, as well as of their national interest. This week we will need to find the right balance between national interests and the approaches we support together as common policies, in instruments such as CAP. We need to ensure that national interests do not outweigh broader EU interests.
That is the first hurdle. The Treaty requires also that any agreement must have the consent of the European Parliament. In today’s more complex institutional environment in the European Union, this cannot be taken for granted. Nor should it be. I believe that we need to respect the interest of the European Parliament in this process.
Ahead of the meeting of the European Council, I met with President Van Rompuy – who will steer our discussions – as well as Presidents Barroso and Schutlz in Brussels on Monday to consider the process that lies ahead.
It is clear to me that tough negotiations will be needed if agreement is to be found.
Some headway was made at the European Council in November, but considerable differences remain.
From my contacts with colleagues, however, I believe that there is a shared appreciation that we need to close the deal this week.
We need to show our citizens and the wider world that we are capable of taking decisions, even on the most difficult of subjects.
In general, the signals from capitals have been encouraging. It would appear that leaders will be heading to Brussels this week with a view to finding an acceptable compromise. That would be good news for the European Union, and indeed good news for Ireland.
Our discussions will pick up from where we left matters in November, when President Van Rompuy tabled a proposal for a budget of about €972 billion for the seven year period, representing a significant cut from the budget proposed by the Commission. In setting out his assessment of how matters stand, President Van Rompuy has been clear that he believes further cuts will be necessary to bring everyone on board.
A main part of our discussion will, therefore, focus on how big these cuts should be and where they should be applied.
In addition, the European Council will also have to reach agreement on the revenue side – an area that we did not get into in detail in November. This involves the very difficult and sensitive question of rebates.
Ceann Comhairle,
I have set out the Government’s approach to the negotiations on a number of previous occasions. We want a properly funded and properly functioning EU. The EU’s Budget must have the right mix of priorities, a fair allocation of resources and – most importantly in our present circumstances - a focus on jobs and growth.
The EU must, in short, have a budget that is fit for purpose.
Our over-riding financial priority has been to protect the allocation for the CAP, and to maximise Irish access to it. The CAP accounts for about 85% of our total EU receipts: it is central to our interaction with the EU.
The Union’s Budget needs a CAP allocation that will support a vigorous, consumer-focused agricultural production base in Europe. The CAP is a vital tool for economic growth, through its support for agriculture; its support for the agri-food and related industries; and its support for the rural economy.
We have made this clear to our partners in Europe.
Our engagement with the MFF is of course not limited to the CAP. We have argued strongly for an MFF with adequate resources for other growth-enhancing measures including research, education, European connectivity and support for the SME sector.
We want the budget to support the Europe 2020 Strategy for Jobs and Growth.
It must have adequate funding for investment in economic growth and the creation of employment. It must have a particular focus on youth unemployment. All Member States – including those with more developed regions – must be able to access EU programmes and funds. The Union’s Cohesion policy must address the challenges that face us today: and the most serious of these is unemployment.
The Union must also have sufficient funds to act outside its borders, most importantly in the area of development and humanitarian aid.
While the gaps between Member States’ positions have narrowed, those gaps are still there. They broadly reflect, in large part, the relative position of Member States, whether they are net contributors or net recipients.
In seeking to broker a deal, President Van Rompuy – who has my full support – will be conscious that the outcome must be one of which each Member State can take ownership. This will not be so if the outcome is presented as one in which there are ‘winners’ and ‘losers’.
We each have to be able to present what is agreed as a fair deal for all concerned.
As the Member State currently holding the Presidency of the Council, Ireland will have a particular role to play if agreement is achieved this week.
Tomorrow morning, ahead of the meeting proper, I will meet again with President Van Rompuy and President Barroso to discuss the work that lies ahead.
Following an agreement, it will be our responsibility to gain the formal consent of the Parliament.
As the House will recall from the recent visit of President Schulz, the European Parliament is fully engaged with the process and is very clear on the outcomes it expects. Ireland has repeatedly stressed the importance of any European Council deal on the MFF being one acceptable to the Parliament.
The Irish Presidency will also have responsibility for chairing discussions on many sectoral regulations underpinning the MFF – including on reform of the CAP – and for negotiating their passage, in discussions with the Council and the Parliament.
As I have said, I expect the negotiations on Thursday to be long and difficult, but I am confident that a deal can be reached if there is goodwill on all sides.
Ceann Comhairle,
On Friday, the European Council will discuss the other items on its agenda, trade and external relations. The latter will include consideration of the Arab Spring and the evolving situation in Mali.
Trade
I very much welcome the discussion on trade – as Presidency we have said that an ambitious agenda on this front is an essential element of any drive for growth and job creation.
President Barroso will brief the meeting on trade-related issues – on which the Commission play a strong leadership role. This discussion will come at a time of unprecedented expansion of the EU’s trade policy agenda.
Trade has never been more important for the European Union’s economy, thus our discussions this week are most timely.
About 30 million jobs in the EU depend on sales to the rest of the world, an increase of 10 million since 1995; this is equivalent to the total workforce working for manufacturing industry in the EU. Over the next two years, 90% of world growth will be generated outside the EU.
It is estimated that an ambitious trade agenda could lead to an overall increase of 2% in growth and the creation of over 2 million new jobs across the EU in the medium term.
This would be most welcome, especially at a time when there are 26 million unemployed across the EU. An active trade policy is therefore a key condition of success both to economic recovery and to job creation.
To benefit fully from the potential trade has to offer, the EU must also invest in increasing its internal competitiveness – making better use of untapped potential of the Single Market; opening up trade in services; strengthening the industrial basis in Europe; and enhancing Europe’s place in global supply chains. These drivers of growth are mutually reinforcing.
I expect that the European Council will prioritise those trade measures that will provide most benefit in terms of growth and jobs to the EU – we must seize the opportunity of higher levels of growth abroad, both in emerging economies and in peer economies.
Immediate priority will be given to developing our bilateral trade agenda in the absence of momentum towards a more comprehensive, multi-lateral approach.
Regarding emerging economies, we should continue to strive to bring these economies to our level of openness. This will bring benefits to developed and to developing countries alike. In this respect the EU is actively pursuing its trade relationship with Russia, China, India, MERCUSOR and ASEAN countries as well as with emerging markets closer to home.
In the short term however, the biggest potential for growth lies in forwarding our new generation Free Trade Agreements with peer economies.
Advancing these agreements will bring challenges for the EU and for our negotiating partners alike such as Japan, Canada and the US, but will ultimately bring longer term benefits in terms of growth and jobs.
In this regard, the EU-US High Level Working Group on Jobs and Growth has been actively engaged in finding ways to tap into the huge potential of this bilateral trade and investment relationship and will present its final report, hopefully very soon. We have said that if it makes a positive recommendation – which is widely anticipated – we will do all that we can during our term as Presidency to advance matters. If at all possible, we would like to see agreement by the Council on an EU negotiating mandate during the Irish Presidency.
Ceann Comhairle,
External Relations
Arab Spring
Foreign policy issues will be addressed by leaders during our working session on Friday morning.
We will first review Europe’s relations with its southern neighbours, two years after the first democratic uprisings in Tunisia and Egypt in early 2011.
Such a review is clearly timely, given the momentous changes which have transformed the Arab world over the past twenty-four months.
Mali
The other foreign policy issue on our agenda this week will be the crisis in Mali, which continues to be a serious concern and a key foreign policy priority for the EU. It is welcome that leaders will also address this pressing situation.
I would expect that President Hollande may brief partners on latest developments on the ground in Mali, where of course French forces are active.
The Tánaiste will elaborate further on both of these foreign policy issues in his contribution to today’s debate.
Conclusion
Ceann Comhairle,
I look forward to again playing a full, active and constructive part – both in a national capacity and as Presidency – in this week’s deliberations on each of the items on our agenda.
As I said at the outset, this meeting will be an important one for the Union and for Ireland. Concluding negotiations on the MFF will mark a real achievement for the EU and one which will contribute very positively to our Presidency objectives of stability, jobs and growth.
I will, as ever, report back to the House on my return.