Can I begin by saying what a pleasure it is to be here – thanks very much to Peter for inviting me to speak. Peter has always been a great friend to Ireland and the Irish Labour Party greatly values our relationship with Roger, Olaf and our friends in Policy Network.
The two issues that you are debating today - “prospects for the eurozone and what place for Britain in Europe?” – are critical for all of us. I am delighted to have this opportunity, as you move from your discussion on one to your discussion on the other, to offer a perspective which I hope can link the two. And to do so, both from the viewpoint of the Irish Presidency, and as the UK’s nearest neighbour.
It is now 40 years since the UK and Ireland joined the European Union together. Since then, our shared membership of the European Project has had a profound impact on our own relationship with each other. And, I strongly believe, we have, together, made an impact on Europe.
At this critical juncture, when there are so many issues at stake for both of us, we must remember what – together – we have achieved in shaping the European project.
And there is, I believe, a lot more that we can and should do.
Prospects for the Eurozone
There can be no doubt that the European project has been sorely tested by the global economic crisis that broke in 2008.
While no Member State was left untouched, those of us sharing a currency had some pretty fundamental questions to answer.
Could – or should – a country be able to leave the euro?
What would this mean for the stability of the currency?
Is it possible or credible to have a single currency and monetary system, without a commensurate degree of economic integration?
What is a country to do when it faces a once-in-a-lifetime economic shock in a context where it no longer has access to some of the tools that have traditionally aided recovery?
These were more than academic questions for Ireland – a country strongly committed to our membership of the Union and of the euro, but experiencing an unprecedented economic crisis of our own.
As many commentators observed at the time, for the euro it was make-up or break-up time.
I think it is also fair to say, that, if you were try to design an organisation that would have problems communicating clear messages to financial markets, you would come up with the European Union.
But for all the problems of communication, when you look at the substance of what has been done, there can be no doubt as to the commitment that has been shown to dealing with our problems.
In Ireland we reached a view at a very early stage that the only path to recovery, both for us nationally and for Europe, lay through a stabilisation of the currency i.e. a commitment to making it clearly irreversible.
At the same time we needed both greater solidarity and deeper integration.
This is the path that has been pursued.
In getting to grips with the crisis we have crossed many rubicons and overturned long-standing taboos.
We have strengthened the rules underpinning the euro, and our ability to enforce them.
We are working towards integration in banking – both in how banks are supervised and in how the consequences of their failure will be handled in the future.
We have greatly enhanced the obligation on those who share a currency to observe fiscal discipline. In Ireland we have even fought – and won – a referendum on the need to impose limits on structural deficits.
The reality is that there has been a very real political response.
Faced with some pretty existential questions, and despite the sometimes very unpromising domestic climates they have faced, Europe’s leaders have demonstrated that they are prepared to take the steps needed to secure the future of the currency and of the Union.
We have built solidarity mechanisms – and without giving rise to the type of moral hazard that some predicted. Commitments entered into by those who have availed of support have been honoured. This has been critical to building and maintaining mutual trust.
The ECB has made it clear that it is prepared to step in to buy bonds in the secondary market where this is appropriate and necessary, subject to conditionality.
We have accepted that the link between banking and sovereign debt must be broken, and we have moved light-years forward on banking union.
This once hugely-controversial principle is now well established, and the Irish Presidency is working hard on arrangements for a Single Supervisor for Eurozone banks, which is due to enter into force next year.
This is a major achievement for progressives.
As financial markets have globalised, it has become abundantly clear that effective regulation requires, at a minimum, an international response. The idea of Banking Union is a truly progressive one, if we implement it properly.
We have, I believe, achieved a degree of stability that now allows us to turn our full attention to the vitally important tasks of recovery – generating growth and creating jobs.
Unemployment across Europe is unacceptably high, particularly for young people. Economic growth is inadequate. But we now at least have the breathing space to get to real grips with these issues.
For our Presidency of the European Council, Ireland has made its priorities clear: stability, jobs, growth.
There is a job of work to be done and we must get on with doing it.
Europe is not just a currency union, or a banking union, or even a single market. For Europe to work, it must be a union of peoples – a union that demonstrably meets the needs of its people. It must be a Europe with a real social dimension.
We need a Europe that establishes a real connection with people, instead of the disconnect that we now have, and which is informing – and sometimes misinforming – the debate about Europe, not least in Britain.
What place for Britain in Europe
But before I speak about the debate on Europe here in the UK, let me be clear about one thing. This is a matter for the British people.
I am acutely conscious that it is not helpful for me to intrude into what are essentially domestic questions – the future position of the United Kingdom in the European Union is, first and foremost, one for the people of the United Kingdom and their representatives.
We have enough experience in Ireland to tell us that intervention in such matters, however well-intended, is not always well received.
It can also prove counterproductive if comes to be perceived as interference.
But discretion should not be confused with disinterest.
The UK and Ireland, shaped - literally - by centuries of shared history, now enjoy a remarkably strong bilateral relationship, and our shared membership of the EU has played an important part in that.
We joined Europe together, 40 years ago.
Within it we have forged a deep and mutually rewarding partnership.
We share enormous common ground, whether on the single market, on justice issues, or on trade.
We regard the European Union as an enormously powerful and positive force for democracy and human rights in the world.
In pressing the case for enlargement, the UK, in particular, has been instrumental in embedding peace and stability in the wider European neighbourhood.
We don’t agree on everything, but our approach often chimes with yours. We often find ourselves on the same side of a debate.
We share the commitment to bringing Europe closer to citizens, and to delivering true democratic accountability.
We both see securing prosperity for our people, and modernising and reforming our economies as the key challenges for today’s Union.
Our shared membership of the European project has helped us both to put the often troubled Anglo-Irish relationship on a more mature and even keel. Today, that relationship has never been stronger, and indeed, it moved into a new and even closer phase following the visit to Ireland of Queen Elizabeth in 2011.
So, when we in Ireland consider the question of Britain’s future in Europe, we do so from a vantage point of strong friendship, deep ties and shared interests.
The European Union is the most significant economic and political project that Europe has ever engaged in.
It will continue, with or without the UK.
But it would be to the benefit of both the Union and the UK, if Britain were to continue to develop and strengthen a leadership role within Europe.
By creating doubt about its future relationship within the Union, the UK risks ceding leadership to other European states.
Today, France and
Germany are still traditional pillars of the Union. But in five years time, that balance will shift as other large countries like Poland come into their own, and as Spain and Italy recover from their present economic difficulties.
This is a moment when the UK has an opportunity to shape the direction of the union, which it can grasp, through engagement, not disengagement.
Because, in the five years ahead, the Union will not stand still.
There are big issues that we have to address, including what happens to our currency, enlargement, and greater economic integration.
There is a real danger that the debate in the UK could focus on one part of the field of play, and real and substantial change is taking place elsewhere on the pitch.
Britain must avoid having a debate with itself, only to find that when the debate concludes, others have moved on.
Relationships are a two-way street. We all know that.
Does the UK wish to find itself in the same position as Switzerland, which has over 120 bi-lateral agreements with the EU, but which is not at the negotiating table when EU positions are being hammered out?
The real question for the British people, is how to lead within Europe.
I have always believed that there is a strong British stamp on the European Union.
The deepening of the single market, the development of a free and fair trade agenda –which Peter led on as a Commissioner. These are real European achievements that reflect long-held British priorities.
We want you to stay fully engaged. We value your contribution. We don’t want an isolationist UK.
We don’t want new barriers or borders – literal or metaphorical – arising between us.
We realise that we are part of an evolving Europe, with the problems in the eurozone being a fundamental driver of change.
Those of us that share a currency – and I fully respect your wish not to do so for now – have been careful to ensure that the rights of others are not trampled, as we have worked to find solutions to the crisis in the Euro.
Of course the Union is not perfect. I don’t believe there is a single political leader in Europe that thinks it is.
It is sometimes stiflingly bureaucratic and seemingly unresponsive – in part a reflection of its institutional complexity, and the checks and balances that are built into European Structures.
It does not always get its perspective on what really matters right, though I think it is improving in this regard.
Euro-myths are just that, myths. But they would not exist, and they would not fuel so many tabloid fantasies, were there not some little germ of truth within them. Does it really matter if you buy beer in pints and I buy it in litres?
But an evolving Europe is also a learning Europe, and a Europe that has plenty of opportunity for Britain to take a leading role.
The crisis has forced a degree of focus on the essentials that may have been lacking in the past.
Discussions at the highest levels are focusing on turning our economies around and getting our people back to work. There is less talk about protectionism, more about openness and competitiveness.
More openness, for example, to the enormous potential of a trans-Atlantic trade deal that both of our countries have pursued.
There is less institutional politicking and more shoulder to the wheel.
I firmly believe that the Union of the future will be one in which the UK can be engaged and at ease.
It will be one in which we work together to fix the problems we face, and in which this shared endeavour deepens the bonds between us.
We want you to stay where you are, at the heart of Europe, challenging the received wisdom and asking the hard questions. That means at the table – sometimes banging it – as a full and active partner and contributor.
We want you working with us for reform and renewal, and for a better, stronger, shared European Union.
But a word of caution.
A long period of uncertainty about the UK’s relationship with the EU is not in any anyone’s interest – not the UK, not Ireland and not Europe. The economic uncertainty that it will create will be bad for all of us.
This is actually about thousands of British jobs. And quite a few Irish jobs too.
Come what may, Ireland’s position is clear. We will stay close to the UK, and we will stay at the heart of Europe.
In this, the 40th year of our shared journey, let us focus on what we can do together, and let us move forward, together.