I am pleased to have this opportunity to brief the House on the outcome of last week’s European Council meeting in Brussels on 22 and 23 November.
The main item for discussion at the meeting was the Union’s budget for the period 2014-2020, the Multiannual Financial Framework.
Ceann Comhairle,
As the House will recall, negotiations on the Multiannual Financial Framework, the MFF, have been underway since the European Commission put forward proposals in June of last year. These negotiations have been highly complex and contentious.
Last week’s European Council meeting ended without the Member States reaching agreement. Nevertheless, I am confident that a deal can be reached before too long.
As the House will recall, on 13 November President Van Rompuy put forward a compromise proposal for discussion at the November European Council.
This proposal contained a range of cuts for all headings of the MFF, with the greatest cuts to be applied to agriculture and cohesion spending. This was seen by some Member States as cutting too deeply, and by others as not cutting enough.
As far as we were concerned, it cut too deeply into the CAP.
Prior to the meeting of the European Council, I spoke to a number of my counterparts, including Prime Minister Cameron and President Hollande, to make it clear what Ireland’s concerns were, and to hear their priorities and their appreciation of the state of negotiations.
Throughout the day of Thursday the 22nd, before the European Council meeting itself began, President Van Rompuy, accompanied by Commission President Barroso, met bilaterally with each of the members of the European Council to get a real feel for the priorities with which each was approaching the table.
I made a number of points to President Van Rompuy when I met him:
- Firstly, I told him that the challenges posed by Ireland’s particular economic situation make a pro-growth EU Budget essential;
- Secondly, I made it quite clear to him that the Common Agricultural Policy is Ireland’s most important financial priority in the MFF negotiations. We get the bulk of our EU receipts from this Heading: I told him that we could not accept the cuts that he had proposed;
- Thirdly, I told him that Cohesion policy should reflect the current economic situation in EU regions, in particular the levels of unemployment.
- Finally, I put a strong case to him for maintaining the PEACE Programme which has played such an important role in helping to sustain peace on this island.
President Van Rompuy listened carefully and took the views I expressed on behalf of Ireland on board.
On foot of his bilateral meetings with Members of the European Council, President Van Rompuy made a revised proposal on Thursday evening.
This maintained the same level of overall cuts to the overall Budget, but with the balance shifted: greater levels of funding were now suggested for agriculture and cohesion. There were cuts proposed to expenditure relating to infrastructure, research, and external action – all important priorities in themselves.
Be in no doubt, there is strong pressure on the funding available under Heading 2 for the CAP.
That downward pressure was reflected in the Commission’s initial proposal, which represented a real decrease of about 7% from the current Framework. That trend was continued in the proposal President Van Rompuy made on 13 November, ahead of the Summit which removed a further 6.2% - or €25.5 billion – from the equation.
However, as a result of the strong and assertive lobbying by Ireland and like-minded Member States, I believe we are turning things around. Some of the ground was made up in the proposal which President Van Rompuy put to the meeting last Thursday.
Of course, his proposal was not agreed and does not, therefore, we can take nothing from granted. As is always the case, nothing is agreed until everything is agreed. But it shows that things are moving in the right direction.
We are now closer to where we want to be, but we are not there yet.
We will keep the pressure up. We will continue to work closely with those Member States who support our position and we will continue to make the case. The CAP is a forward-looking, growth-oriented policy. It is one of the truly common policies of the Union. It must be properly funded into the future.
Discussion took place among the members of the European Council on the evening of the 22nd and then again on the 23rd. I made Ireland’s position on the MFF- and on the CAP in particular - very clear to our EU partners.
The House will recall that we have consistently called for the EU’s Budget to have the right mix of priorities, a fair allocation of resources and a focus on jobs and growth. We have called for a CAP adequately funded to support a vigorous, consumer-focused agricultural production base in Europe, a CAP that can continue to be a vital tool for economic growth. We have called for an EU Budget that has adequate resources for other growth-enhancing measures including research, education, European connectivity and support for the SME sector.
Other Member States similarly put forward their views on the MFF at the meeting.
Unfortunately, the meeting ended without agreement.
A short statement was agreed, which gave President Van Rompuy and President Barroso a mandate to continue work on the MFF and consult with Member States in the coming weeks to find consensus on the MFF.
The statement noted that the bilateral meetings with President van Rompuy and the constructive discussion within the European Council showed a sufficient degree of potential convergence to make an agreement possible in the beginning of next year, and expressed confidence that the existing divergence of views could be bridged.
It is of course disappointing that the European Council ended without reaching agreement. Nevertheless, I feel that progress was made and that the meeting was useful in a number of respects:
Firstly, the meeting took place in a constructive atmosphere. Member States made their positions clear, but without acrimony. Member States were able to agree the statement I have just cited without difficulty.
There is no prospect of lack of agreement on the Budget distracting from the important work of next month’s meeting of the European Council at which President Van Rompuy will present his proposals for a strengthened Economic and Monetary Union.
Secondly, no Member State was isolated. There had been fears that this might happen, given the particularly strong views of some partners, but a spirit of aiming for consensus prevailed.
Thirdly, the gaps between Member States’ positions have narrowed somewhat. We do not have agreement, but we have the possibility of agreement in sight.
President Van Rompuy will now continue his work on the MFF. He will consult further with Member States with a view to identifying where agreement can be found. He will return to the European Council early next year.
In the meantime, I will keep in contact with my colleagues, including President Van Rompuy, and Irish officials will do likewise.
The failure to reach agreement last week will of course have implications for our EU Presidency which will begin on the first of January – just a little over four weeks away now.
President Van Rompuy will, of course, play the lead role in taking the negotiations forward. The mandate to do so is his. He faces significant challenges in this – the overall amount; the relative amounts for Cohesion and Agriculture; the allocations for infrastructure, for research, for SMEs.
And he must also find agreement on the very contentious issues of the funding of the budget – the sources of revenue which the EU should have and the kinds of rebates that are made available to Member States in certain circumstances.
I am confident that he will succeed. I have said to him that Ireland, as in-coming Council Presidency will support and assist him in any way he wishes. We are at his disposal.
Once agreement is achieved in the Council, it will be necessary to secure the consent of the European Parliament for the new Framework. This will be a very important challenge for us as Presidency.
This is the first Framework negotiated since the Treaty of Lisbon entered into force. The Parliament’s consent is required for the Framework to be adopted. There can be no MFF without the Parliament, a point of which I remind European Council colleagues when we sit down to negotiate a deal.
Once agreement is achieved in the Council, working with the Parliament will be a key task for us as Presidency.
We will also specific responsibility for advancing almost seventy separate pieces of legislation that will underpin the MFF. These cannot be finalised until the MFF as a whole is agreed, since the amount of funding and many of the conditions and elements for this legislation will only be set in the
final MFF agreement.
We will therefore work with President Van Rompuy to help to secure the earliest possible agreement, so that we can make the kind of progress we had envisaged for our six months in the chair.
Ceann Comhairle,
At the end of the day, any agreement on the MFF will have to be one which reflects the current economic realities; one which provides the means to invest in growth and jobs; and one which can be perceived by the electorates of Europe to be fair. And it will have to be one reached by consensus.
As a Union, we face a challenging global environment. The Union makes our position in the world stronger, and we are at our most effective when we act together. If that spirit guides us in the negotiations ahead, I remain confident that agreement can and will be achieved.
It will not be a deal in which any one partner – including Ireland - gets everything that it wants. It will be a compromise. But it will be a deal which will enable the Union to set its course for the next seven years.
Appointment to Executive Board of the ECB
While clearly the firm focus of last week’s meeting of EU leaders was on the MFF, Heads of State or Government did also address briefly one other piece of business – that was filling the vacancy on the Executive Board of the European Central Bank (ECB) which has been outstanding since the beginning of June.
In line with the procedure set down in the EU Treaties, the European Council appointed Mr. Yves Mersch of Luxembourg to the Executive Board of the ECB as and from 15 December 2012. I supported and warmly welcome this decision to appoint a person of recognised standing and professional experience – these being the requirements for this position, as set out clearly in the Treaties.
This decision was made following a recommendation by the Council as well as opinions provided by the ECB’s Governing Council and by the European Parliament, which in the latter case provided a negative opinion on the grounds of lack of gender balance.
I regret that the decision last week of the seventeen euro area Member States was not unanimous in appointing Mr. Mersch. One euro area Member State opposed the appointment, but not on the basis of gender balance nor out of concern that the candidate did not meet the requirements for the job.
I wish Mr. Mersch well in his important work as a member of the ECB’s Executive Board.
Conclusion
Ceann Comhairle,
I wish to assure that House that as Presidency of the EU Council from January next – and indeed in advance – we will continue to work with President Van Rompuy and with partners to ensure that the Union provides itself with the kind of multi-year budget which will facilitate our collective endeavours at EU level. It is strongly in the interests of Ireland – as a Member State and as incoming Council Presidency – and of the entire European Union that we reach agreement on a new MFF as early in the New Year as possible. I will of course keep the House informed on developments in this regard.