Statement by the Taoiseach on the outcome of the European Council, Brussels

Last week was a momentous one for Ireland and for the European Union.

When we took on the Presidency at the start of January, we said that 2013 would be a new phase in the EU’s drive for recovery.

We said we would be a recovery country, driving recovery in Europe.

Last Thursday, I came to the House to report an outcome on the Promissory Notes that delivers a fairer and more sustainable arrangement for the Irish people.

I said that the new plan will lead to a substantial improvement in the State’s debt position over time, and that it represents an historic step on the road to economic recovery.

I also said that it showed that the more Ireland was prepared to help itself, the more others will assist us along the difficult path we still have to travel.

Ireland and Europe working hand in hand, making progress together towards recovery.

When I left his House, I travelled to Brussels for an important meeting of the European Council.

As I set out here last week, the main item on our agenda was the search for agreement on the Union’s future budget.
Nobody doubted that this would require a long and difficult negotiation. And so it proved.

But, after discussions that ran through the night, we emerged on Friday with a result that is good for Ireland and good for Europe.

It fully secures our national interests.

Under the new Framework, our payments to the Union’s budget will be of the order of €10 billion, while our receipts will be in the region of €12 billion. We will remain net recipients, at least until 2020.

In the context of a budget that is smaller overall, the outcome provides for a strong CAP, supporting a strong agricultural base, helping to drive economic growth and recovery.

Ireland’s key national priority was fully secured.

The Framework agreed last week contains an allocation of over €343 billion for Heading 2 – “Sustainable Growth: Natural Resources” – delivering €1.5 billion per year in payments to Ireland.

In addition, in the negotiations, the Irish team – and I would like to pay tribute to the role played by the Tánaiste and the Minister of State for European Affairs – argued strongly that the impact of the economic crisis in this country had to be reflected in any deal.

Partners agreed. In the agreement reached last Friday, special allocation is made for the BMW region in particular, which will receive an additional €100 million.

We also secured an additional €100 million for Ireland under Rural Development – an important contribution which will help to underpin our efforts to make agriculture and agri-businesses important drivers of our economic recovery.
We also stressed the need to tackle unemployment, specifically youth unemployment. As the House is aware, this is a problem that has reached unprecedented levels, with some Member States now experiencing rates well in excess of 50%.

Europe cannot afford a lost generation.

I therefore very much welcome the focus this vital issue has been given in the new budget, and that Ireland will share in a €6 billion fund being set up to tackle youth unemployment in those countries where the challenge is greatest.

Ireland strongly supported the original proposal for the MFF made by the Commission. But one way in which we felt it fell short was in the absence of continued funding for the PEACE Programme.

In the context of recent events, it is clear that a job of work remains to be done if we are to secure lasting peace and reconciliation on this island.

The Tánaiste and I advanced this case strongly throughout the negotiations, and successfully secured a provision of €150 million for PEACE in the new budget.

As I have said, this is a very good outcome for Ireland.

It is also a good outcome for Europe.

It is a budget designed to help lift Europe out of the crisis it has faced in recent years. It is forward looking, supporting jobs and growth and economic recovery.

It has an emphasis on growth-enhancing areas, including education, research and innovation – €125 billion has been agreed for the area of Competitiveness for Growth and Jobs, with Erasmus and Research and Development being singled out for real growth.

It is a budget that maintains solidarity with the less developed Member States of the Union.

This House appreciates well the extent to which Ireland has been able to make good use of the funds it has received down the years through the Union’s structural and cohesion funding.

Though we are no longer large recipients, we argued throughout the negotiation that such funding is a win-win – allowing those Member States that need to catch up to do so, while providing new markets and opportunities for business in the more developed Member States.

Promoting economic, social and territorial cohesion is an important objective of the Union. Cohesion policy is the main instrument though which it is pursued. I am, therefore, pleased that a significant portion of the budget agreed last week – €325 billion – will continue to be dedicated to that goal.

The Framework adopted last week also reflects current economic realities, making every euro count.

At €960 billion, it represents a decrease of around 3% on the last MFF.

As the House will be aware, there were a number of Member States arguing strongly for even more financial restraint and for deeper cuts. This was a key issue in our discussions last week.

While Ireland supported the proposal made by the Commission – which was higher than the Framework agreed – I am confident that the right balance was struck in the compromise that has now been hammered out.

The frank political reality is that Ireland is not alone among Member States in having to take tough decisions to bring public spending into line. This was inevitably going to be reflected in any outcome.

What we have now is a leaner budget, but one with the right focus and emphasis.

Less spending on administration; more on those areas with the potential to deliver jobs and growth.

Ceann Comhairle,

I went to last week’s European Council seeking a good deal for Ireland and a good deal for Europe and I am confident that those goals were secured.

I also wanted to impress upon colleagues the importance of the final deal being one that can secure the consent of the European Parliament.

The days when Member States can act alone on the budget are long gone.

As Presidency, we now have the responsibility of bringing the Parliament on board.

Following last week’s agreement, the Commission will prepare a draft Regulation on the MFF, and an Inter-Institutional Agreement between the Council, Commission and Parliament.

Once these are agreed in Council, we will bring them to the Parliament.

In his presentation to the European Council last week, President Schultz made it clear that the Parliament’s support cannot be taken for granted. In last week’s negotiations, it placed particular emphasis on the need for the budget to be realistic – as I believe that it is – and for it to contain within it sufficient flexibility to deal with whatever lies ahead.

The Framework will be in place from 2014 until 2020, and it is difficult to predict with any certainty the economic situation that will prevail over such a long horizon.

In inviting the three institutions – Council, Commission and Parliament – to come to agreement on the funding of each programme and fund, it was therefore appropriate that the European Council suggested that, in doing so, they include the possibility of a review. This will enable us to reflect at mid-term on whether the assumptions on the Framework agreed last week was based remain valid.

The European Council also agreed that within the new Framework “specific and maximum flexibility” will be implemented to allow the Union to fulfil its obligations.

This is something we will explore further in the negotiations ahead with the Parliament. While I recognise that these will not be easy, I have told President Schultz that the Irish Presidency stands ready to work cooperatively and in good faith to deliver an agreed outcome.

We will also do our very utmost to ensure that the almost 70 separate pieces of sectoral legislation on which the Framework will rest are adopted by the Council and the Parliament in good time. This is a key task for us as Presidency.

Trade
As I have said, the outcome on the MFF was a good one for Ireland and for Europe. That is true also of the substantial Conclusions we adopted on trade.

Consideration of trade issues at the first European Council meeting to be held during our current Presidency of the Council was timely and welcome, gelling well with the priorities we have set for our term.

As I have said before, an ambitious trade agenda is a critical element in our push for sustainable growth and job creation across the European Union.

The scene for last week’s consideration of trade issues was set by a useful European Commission paper, which President Barroso shared with leaders ahead of the Summit.
The Conclusions adopted reflect the very real potential that trade can deliver – potentially a 2 per cent increase in growth in tandem with two million jobs.

These are very serious numbers that we want to see turned into reality.

It is estimated that over the next decade to decade and a half approximately 90 per cent of global economic growth will be generated outside Europe. Europe must position itself to take maximum advantage of these major external sources of growth.

For Ireland, as a small, open, trading economy, we have long seen and appreciated how trade in goods and services can energise our economy.

It is most welcome that that potential is now reflected so clearly in European Council conclusions.

While the EU remains committed to further development of the multilateral trading system, last week’s European Council agreed that our immediate priority must be developing our bilateral trade agenda. In doing so, we will prioritise negotiations that will provide most benefit in terms of growth and jobs.

This is the right approach.

In setting out our Presidency Programme, we said that the Irish Presidency would place a special focus on the EU-US trade relationship, with the aim of working towards a formal Council mandate for the start of negotiations on a new comprehensive EU-US Free Trade and Investment Agreement.

There is now real momentum behind this project.

Last week, the European Council called for urgent follow-up during our Presidency to the report of the EU-US High Level Working Group, expected to be published today.

Last night, it got a real boost in President Obama’s “State of the Union” address, when he gave his imprimatur to the launch of talks because “trade that is free and fair across the Atlantic supports millions of good-paying American jobs”.

Nobody knows better than Ireland that this is a two-way street.

What is good for the US, is good for Europe.

In reply to President Obama, I offer the absolute commitment of the Irish Presidency to taking this work as far forward as we can during our term.

This is a real priority for us.

Last week’s European Council also adopted Conclusions on the Arab Spring, Syria and Mali, about which the Tánaiste will say more in his contribution to today’s debate.

Ceann Comhairle,
Last week was, as I have said, a good one for Ireland and for Europe.

The achievement of a positive outcome on the Promissory Note was, in no small part, a reflection of the slow and painstaking work that has been done to rebuild and restore Ireland’s reputation in Europe.

It demonstrates clearly that our partners appreciate our seriousness of intent, and will row in behind Ireland in our efforts to secure our recovery.

That commitment is also reflected in the outcome of the negotiations of the Union’s budget, where partners were prepared to take concrete steps to recognise the particular circumstances of this country, and the impact the economic crisis has had on it.

Last week should help to restore confidence in Europe, both here in Ireland and across the Union.

Despite the sometimes very different perspectives and interests that the Union’s Member States and institutions bring to the table, the capacity to reach compromise and to take difficult decisions remains strong.

We will continue in our efforts to secure our economic recovery; and we remain committed to delivering a Presidency that makes a real difference.