I am pleased to brief the House on the outcome of the Spring meeting of the European Council which took place in Brussels on 14 and 15 March.
This month’s Summit meeting took place in an atmosphere of relative calm, but its deliberations were no less important for that. As is traditional at the Spring European Council meeting, our focus was strongly on economic policy, with an particular focus on how we can ensure a return to sustainable growth and job creation.
Ahead of this meeting, I informed this House that implementation would be a key message. That turned out to be the case. Leaders agreed that implementation of the broad array of measures already agreed – whether they be in the areas of: the Single Market; the Compact for Growth and Jobs; the recently agreed Youth Guarantee; and the ‘two-pack’; or the banking union package – must be our collective priority.
I briefed colleagues on the work the Irish Presidency is advancing across a whole range of policy areas to boost jobs and growth. We have already had some very notable successes, including agreements on the ‘two-pack’ of economic governance measures; the capitalisation of banks; the Youth Guarantee, which will help our young people get off to a good start; and the reaching of an agreed Council position on the reform of the Common Agricultural Policy. I told the meeting that we would continue with our shoulder to the wheel to the very last minute of our period in office – there is no time to be lost.
Progress continues. Since the Summit, we have reached provisional agreement with the European Parliament on the critically important Single Supervisory Mechanism for European banks – a keystone in the banking union package. This represents a major and concrete step in making the June 2012 decision to break the debilitating link between banks and sovereigns a reality.
I also encouraged my colleagues to approach those files on which we are continuing to work across the various formations of the Council, with the maximum degree of flexibility and compromise.
These include important files in the Single Market on professional qualifications, public procurement and accounting; as well as the outstanding elements of banking union. The Single Market is one of the Union’s most valuable assets in the search for growth. We have to make the most of it.
Economic Policy Matters
As is customary, our meeting opened with a presentation from European Parliament President Martin Schulz. He focused on the Parliament’s views on the Multiannual Financial Framework (MFF) on which it had cast a resolution critical of the agreement reached at the European Council in February the day before the meeting.
In that decision, it gave a mandate to its negotiating team to seek increased flexibility within the MFF; a review clause; and an agreement on own resources. It also said that the Parliament would not open negotiations on the MFF until the Commission brought forward a draft Amending Budget to cover unpaid payment claims for 2012.
While the MFF was not on the agenda for the meeting, I took the opportunity to set out for President Schulz and for colleagues our determination as Presidency to get full negotiations with the Parliament underway as soon as possible, and said that I would work in good faith with him to secure agreement.
– European Semester
Following the exchange with President Schulz, we moved on to discuss economic and social policy.
A key focus in this regard was providing clear direction for national and EU-level economic policies against the backdrop of unacceptably high unemployment levels: 26 million without jobs across the Union.
While drawing encouragement from the steps taken so far to stabilise an extremely difficult set of circumstances, we acknowledged clearly the need to redouble efforts towards growth and job creation.
President Van Rompuy highlighted four particular strands that capture well the emphasis of what was agreed.
First, the need to restore financial stability and to maintain it. This is critical for confidence of consumers and investors alike, and it means pressing ahead with work on banking union in particular.
Second, the need to ensure public finances be structurally sound. This entails a path for fiscal consolidation that is both growth-friendly and differentiated, according to national circumstances.
Third, the need to bring new urgency to the fight against unemployment, especially of young people. Indeed, all our efforts are aimed at this overarching goal. Financial stability and economic recovery are the foundations on which the job creation necessary to respond to the unemployment crisis will be built.
Fourth, the need to support long-term growth. This implies continuing to pursue the difficult process of structural reforms, restoring competitiveness, and unlocking a new wave of business investments that will underpin a sustainable recovery.
These strands are of course strongly interdependent, and we need to press ahead coherently on all four.
Member States will now prepare their national reform and jobs plans in April, the review of which will inform clear country-specific orientations to be agreed in June.
Along with the development of those country-specific orientations, a full review of the Compact for Growth and Jobs has been lined up for our June meeting of leaders, one year on from its adoption.
The Spring European Council noted that the €10 billion increase in the EIB’s paid-in capital agreed last year will help co-finance up to €180 billion worth of projects over the coming three years. We agreed that the June Summit will place particular emphasis on measures aimed at creating jobs and boosting the financing of the economy for fast-acting growth measures.
The Commission, together with the EIB, will report to leaders on targeted priorities, in particular as regards infrastructure, energy and resource efficiency, digital economy, research and innovation and SMEs. I will also be meeting again in Dublin next month with the President of the EIB, Werner Hoyer, to discuss these matters, as will Ministers Noonan and Howlin.
In line with what this Government has said since coming to office, I am satisfied that this meeting of the European Council recognised the urgent need to address unemployment – especially among the young.
It is the most important challenge we face.
This corresponds with our priorities as Presidency – our drive for stability, jobs and growth are not abstract ambitions. They are rather the means to achieve and secure a jobs-rich recovery.
Again, implementation is the key.
Ahead of the meeting, President Van Rompuy wrote in stark terms to members of the European Council setting out his strong disappointment at the unacceptable delays in delivering progress on key Single Market files. This was something we also discussed together. As I have said, delivery is a key priority for us as Presidency.
We urgently need to conclude work on Single Market Act I files that remain open, while aiming for as much progress as possible on key Single Market Act II files as these are published over coming months.
This meeting also agreed further important action on cutting red tape. An extensive consultation with SMEs has identified the top ten pieces of EU legislation imposing the highest compliance burdens. The Commission will revert to leaders in June with concrete proposals to address these SME concerns. In identifying the top ten most burdensome EU laws, the Commission included the following in the top five:
– REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals);
– VAT – Value added tax legislation;
– General Product Safety and market surveillance package;
– Recognition of professional qualifications and
– Shipments of waste – Waste framework legislation.
The Commission will also ensure swift and effective implementation of its ‘regulatory fitness’ (REFIT) programme – rapidly identifying the regulatory areas and pieces of legislation with greatest potential for simplifying rules and reducing regulatory costs. We look forward to its first proposals here in the autumn.
This is also a key focus for us domestically under the Action Plan for Jobs. For example, we estimate that the single application system we are introducing for up to 25 licences is set to save the retail sector upwards of €20 million per annum. Led by Minister of State John Perry, and beginning with the retail sector as a pilot project, an integrated Licensing Application System will be designed in the first half of 2013 and implemented by Q4.
– Deepening EMU
We did not have a full discussion on strengthening Economic and Monetary Union – that awaits finalisation of President Van Rompuy’s report in June.
However, the European Council took the opportunity to recognise again that any new steps towards a deeper EMU must be accompanied by parallel steps to ensure stronger democratic accountability and legitimacy. We have also been asked by President Van Rompuy to address the social dimension . As we move forward, we must never forget the necessity to bring people with us.
A key element in qualitatively deepening EMU is, of course, banking union. The Irish Presidency continues to give top priority to files relating to the promotion of the banking union and the good progress we are making was recognised by the European Council.
We have now achieved provisional agreement with the European Parliament on the Single Supervisory Mechanism (SSM), as well as reaching agreement on the Capital Requirements Directive (CRD IV).
These are significant achievements which represent important steps towards banking union, restoring confidence in the European banking system and building stability across Europe.
The setting up of the supervisor will pave the way for the European Stability Mechanism (ESM) to take on the direct recapitalisation of banks.
Intensive efforts are also underway by the Irish Presidency to accelerate Council discussions on the Banking Resolution file with a view to reaching agreement on key political issues.
All of this important work is underway in the context of the key decision made by Heads of State and Government on June 29th last year, when “they affirmed that it is imperative to break the vicious circle between banks and sovereigns.” We will spare no effort in working to deliver on that commitment.
Euro Summit and Cyprus
Following the Conclusion of discussions at the European Council on the Thursday evening, leaders of the seventeen euro area Member States met for a Euro Summit meeting.
We heard from ECB President Draghi on how to lay the foundations for growth. In an interesting presentation he highlighted some of the critical factors required, including confidence, credit and competitiveness. This was followed by a useful exchange in which we each reflected on some of the key issues confronting individual Member States.
I highlighted the progress that Ireland has made towards recovering its competitiveness as we look forward to exiting our Programme later this year.
While we welcomed the new Cypriot President, Nico Anastasiades to the table, we did not discuss the developing situation with Cyprus in detail, as it was to be discussed by Finance Ministers, in the Eurogroup – chaired by Dutch Finance Minister – on the Friday afternoon.
On that subject, let me say that I welcome the fact that it has been possible for the Cypriot authorities to reach an agreement with the Troika that will allow a Programme of support to be put in place. As the House will be aware, this was a very complex and sensitive process, and will be exceptionally challenging for the Cypriot people.
From hard-won experience, we in this country know the real strain associated with the agreement of such a Programme, and the very genuine anxiety it creates among citizens.
I hope that it will now be possible for the Cypriot Government and people to focus fully on economic recovery, though I appreciate that there is a very difficult journey ahead. I would like to assure them that the Government and people of Ireland are with them at this difficult time, and that they can rely on our support as they seek to emerge from their difficulties.
Can I also say that I very much welcome the fact that all deposits in Cypriot banks below €100,000 have been fully safeguarded. This is an important reassurance to savers across the Union.
Unfortunately, however, given the debt dynamic that exists in Cyprus, there were simply no easy options available. The path that has now been agreed, even though it is onerous, represents the best available outcome under these very difficult circumstances.
Foreign Policy Matters
While economic matters were the focus of our work on the Thursday afternoon and evening, on Friday morning, 15 March, we moved on to Foreign Policy matters.
We had a useful and welcome discussion of the EU’s strategic relationships, with a special focus on Russia, one of a series of such discussions planned by President Van Rompuy.
The wide-ranging and positive discussion – in which the complexity of our relations with Russia was fully recognised – focussed on the many areas where we enjoy strong cooperation in terms of mutual trade and investment; in our energy relations; and as partners in international fora in the pursuit of peace and security.
It also addressed the areas where differences exist, and we reflected on how best to convey our differing views in our dialogue with Russia.
Indeed, there was a clear agreement that the EU must adopt a more coordinated approach to its relationship with Russia, and that we need to work towards stronger, single EU messages on key issues in the strategic partnership.
Also on Friday morning, Prime Minister Cameron briefly up-dated leaders on preparations for the G8 Summit which will take place in Lough Erne, Co. Fermanagh in June. The main agenda will deal with Terrorism, Tax, Transparency and Trade (the four Ts). We are cooperating closely with the British authorities to assist in ensuring the success of this significant event.
Before concluding the meeting, the issue of EU policy in relation to Syria and, in particular, the question of the arms embargo, were briefly raised by President Hollande and Prime Minister Cameron.
After a short exchange of views, it was agreed to ask EU Foreign Ministers to address this topic as a matter of urgency, starting with a thorough discussion at the informal Foreign Affairs meeting that took place in Dublin last Friday and Saturday.
As the Tánaiste hosted that meeting in Dublin Castle last weekend, he will address the matter in his remarks later.
Meetings in the Margins
While in Brussels, I also had a number of meetings which may be of interest to the House.
On 14 March, I co-chaired the Tripartite Social Summit, which brings together social partners at EU level. We had an excellent exchange with representatives from European trades unions and businesses on how to move from crisis to stability, and how to generate growth and employment. We also exchanged views on the social dimension of EMU.
While the Multi-annual Financial Framework was not on the European Council’s agenda, I met with Presidents Barroso and Schulz to discuss the consultations we have had with the Parliament to date and to ensure that we are all working together cooperatively to secure the earliest possible agreement. Putting a budget in place for the Union for the period 2014-2020 will help to ensure a degree of certainty and security that will underpin economic stability.
Separately, I also had a brief bilateral meeting with Prime Minister Cameron, building on our Summit meeting in London earlier this month.
The outcome of this month’s European Council was a welcome one, for the European Union, as well as for Ireland nationally and as Presidency.
There was recognition of what has already been achieved, including under the Irish Presidency, but more importantly, there was a recognition that a wide range of measures which have been agreed, remain to be implemented or to be implemented in full. We must act on these.
Over the coming months of the second half of our Presidency, we will bring all our energy to make as much progress as humanly possible right across the full range of our priority files – all the time with the objective front and centre of restoring stability, and encouraging sustainable growth and job creation.
I will, of course, continue to keep the House updated on all relevant developments.