Taoiseach’s Address to the Economic Ideas Forum, Future Steps in Strengthening the EU

It is a very great pleasure to be here today – from what I have heard, there is a lot of energy in the room, the type of energy we need to really get Europe moving again.

At the outset, I would like to thank Prime Minister Katainen and the Centre for European Studies for hosting this important seminar.

We may be in the last weeks of the Irish Presidency, but as I have said many times, we will be working until the last minute of the last day to advance our agenda for stability growth and jobs.

Today, I’d like to say a little about what we have been able to achieve, and what lies ahead, and also to address some of the wider themes touched on in the discussions you have been having.

Reacting to the Crisis
The economic crisis Europe has experienced in recent years has been profound. It has affected us all differently – whether in Helsinki, Dublin or Athens – and it has fundamentally altered aspects of how the Union works.

It has taught us the critical necessity of closer economic coordination in a currency union, and the very real dangers of overspill from one Member State to others.
We have strengthened the Stability and Growth Pact, making it easier to enforce the rules and giving them real teeth.

We have adopted the legislative six-pack.

As Presidency we were able to finalise agreement on the two-pack, strengthening budgetary coordination and enhancing mutual surveillance so we can better see trouble when it is coming down the track.

We have the European Semester process that will result in binding Country Specific Recommendations on reforms to be adopted by the European Council when it meets later this month. These should guide the action of Member States in the period ahead.

Member States across the Union are now more seriously engaged that ever before – and in a more credible way – in implementing unprecedented national reform plans to restore competitiveness, financial stability, growth and confidence in their long term fiscal sustainability.

It was important for us as Presidency to oversee this process in a way that made it meaningful and that facilitated deep engagement between the relevant actors. I believe that we have, so far, succeeded.

We have enacted the Fiscal Treaty that puts the need for sustainable budgetary policies on a sound and irreversible legal footing in Member States – in Ireland we fought and won a referendum on its contents in May of last year.

We have established the European Stability Mechanism as a credible and permanent backstop for countries in difficulties; we are working to ensure that it can also play a role in any future banking crisis.

The various Union institutions, not least the ECB, have played their part in restoring stability to a currency that, just twelve months ago, was seen to be under existential threat. Where it has been needed, creativity and innovation have been found.

So, as we look to the future, we should at least allow ourselves a brief pause to take some satisfaction from what has been achieved together.

While we have had many difficult meetings, and ups and downs, when push came to shove – when the market wolf was at the door – the European family pulled together, in keeping with its finest traditions.

As a result, we have made great headway on that first Irish Presidency goal, restoring stability.

Building for the Future
But while stability is an absolutely necessary prerequisite, it is just a first step. We are far from out of the woods yet.

The steps we have taken have provided us with some respite. They have provided investors and the European public with increased confidence that the currency is durable – it is not going to collapse, and that we will do everything necessary to stand behind it.

It has demonstrated that Member States pursuing sustainable fiscal and economic policies will be supported.

But there is no escaping the fact that we continue to face very great challenges indeed – without recovery, growth and, most especially, job creation, the stability we have wrought cannot be regarded as necessarily lasting or secure. There is no room for complacency.

That is why this month’s meeting of the European Council will be such an important one.

When we meet, our focus will be on driving reforms; on implementing the Compact for Growth and Jobs adopted last year; on pressing forward with banking union; on strengthening EMU; and, most especially, on getting to grips in a real way with unemployment.

There are simply no more vital topics and there is no denying their urgency.

Last week, we heard from the Commission on the steps that each of us needs to take at national level to boost competitiveness and to make our economies more dynamic. As Presidency, we will now work to ensure these recommendations are adopted by Member States.

For Ireland, this means continuing with the difficult Programme of reform in which we have been engaged in recent years.

I am here to tell you, it is difficult and it may not always be popular.

In Ireland, we have implemented unprecedented deficit reduction measures equivalent to 18% of our GDP (equivalent to almost €15,000 per family), we have taken actions to recover much of the competitiveness lost during the credit-fuelled property bubble.

Many of the measures we have had to take have been very painful and difficult for the Irish people who have responded to the crisis with great resilience and pragmatism, for which I thank them.

We have cut social security taxes on employment and VAT on labour-intensive services. We have protected public support for research and innovation.

We have avoided increasing direct tax rates on income and business profits.

We have reformed restrictive labour market practices, overhauled sectoral wage-setting mechanisms, liberalised previously closed professions and cut public and private sector costs.

Cost competitiveness has improved by over 20% since 2009 compared to our EU competitors.

We are now ranked by independent studies as the 2nd most attractive country globally for Foreign Direct Investment.

We are ranked 1st in the eurozone for ease of doing business and 1st globally for the availability of skilled labour.

Recovery is slow and painful journey, but it is, ultimately, the only way.

It is very clear, that national measures, while essential, will not be sufficient on their own. We also need collective action to drive growth and jobs.

As Presidency, we have been able to achieve progress in a number of important areas. But there is always room to do more.

I have therefore recently written to my European Colleagues to secure their support for a real push in the final weeks of our term, highlighting a number of areas I regard as vital.

On banking union, we have already made very credible steps towards delivery of the commitments we made last June.

As Presidency, we were pleased to be able to secure agreement on the Single Supervisory Mechanism, which will now enter into force next year. We were also able to conclude work on the Credit Requirements Directive, which will ensure that Europe’s banks are better positioned to withstand future economic shocks.

But a key remaining step for our term is agreement on the Banking Recovery and Resolution Directive, which I fully believe remains within our grasp. We want to have a final package to present to ECOFIN later this month. We also want to keep to the June deadline for agreement on the Deposit Guarantee Directive, which was reiterated by the European Council in March.

Banking Union is a necessary part of a functioning currency union. But making it a reality is also a litmus test of our capacity as leaders to deliver on the commitments we make. We promised that we would break the vicious circle between banking and sovereign debt and we cannot do so without a genuine banking union.

Letting the pace slacken will damage our credibility and undermine the fragile confidence we have succeeded in building.

As we approach the anniversary of the Compact for Growth and Jobs, we also need to be doing more at the European level to boost employment, especially for the young, and to help our businesses grow.

There are new and creative ideas being advanced on how we can get investment flowing in the real economy – building on the increased capital we have provided to the European Investment Bank, and working in an innovative way with the ECB.

Some of these could have an important to play in targeting youth unemployment and in helping our SMEs to grow and to create jobs.

In February, as Presidency we were able to achieve agreement on the Youth Guarantee. Now we need to translate that agreement into practical arrangements on the ground.

As President Van Rompuy has said, our June meeting later will be an opportunity to mobilise efforts at all levels around one shared objective: to get motivated young people back to work or education.

We need to deliver the €6 billion for this work promised in the Union’s new budget and to consider whether it should be front-loaded to deliver impact when it is needed.

But, to be in a position to do so, we need first to secure the European Parliament’s assent to the Multi-Annual Financial Framework so that it can be in place, on time. The Presidency team – headed by myself and Tánaiste (or Deputy Prime Minister) Eamon Gilmore – will leave no stone unturned in our efforts to reach a positive outcome.
But we do so as agents of the Council, and can only succeed with the constructive engagement of the Parliament’s team. I remain hopeful that we will get there, but have no illusions about the difficulties involved.

We will, however, continue to give it our all.

There are also proposals in the area of the Single Market that could make a real difference if we could agree to unlock them- proposals on professional qualifications; public procurement; e-identification and signature; and posting of workers. We need to get them over the line.

We can also make a significant step forward on trade, which I regard as a real engine of growth, in the weeks ahead.

In February, the European Council called for a real push on agreements with key partners, prioritising those that will contribute most to growth and jobs.

In April, Ireland organised the first informal meeting of Ministers dedicated entirely to trade matters, with a particular focus on the United States.

There are sometimes decisive moments, when the time is right for a bold step forward. This is where I believe we are on a Transatlantic Trade and Investment Partnership with the US.

The forces on both sides of the Atlantic are aligned. The EU sees the potential and, at the highest levels, the US is engaged. There may never be a better opportunity.

Our aim is to achieve agreement on a negotiating mandate in June. The goal is historic. It is of great significance. It is also practical and achievable, with the right will.

I appreciate that there are sensitive issues involved for some, probably all, Member States. As Presidency we will work hard to address them.

But we should not allow concerns to become obstacles to what everyone agrees would be a transformative agreement, with enormous potential for growth and jobs for all of our people.

Conclusion
Ladies and Gentlemen,

There are some who have argued that the European Union has been damaged and weakened by the crisis it has faced.

I do not believe that this is true.

Certainly, there are some among our citizens who have lost faith, and we need to work hard to regain their trust.

But fundamentally the Union is stronger. We have shown that we can work together to overcome some of the most severe difficulties we have faced.

We have equipped ourselves with new tools to face the challenges of a new era.

The Union’s values – including that most central one, solidarity – have prevailed.

This should give us heart and strength for the difficult tasks that lie ahead.

Building recovery; generating growth; creating jobs.

Robert Schuman was right. Europe was never going to be built all at once or according to a single plan. Rather it will result from concrete achievements that accumulate over time.

Our work together is just the latest stage in a remarkable journey.

As Presidency, we are conscious that we are part of a long chain that links Europe’s past and its future.

For six months, we have – and we will – give of our very best.

But we know also that Lithuania is fired up and ready to go and we look forward to passing the torch forward to them.

I have no doubt in their capacity – in our capacity – to work together for a bigger, better, more peaceful and prosperous European Union.