I thank the Chairman and the members of the joint committee for inviting me to share a perspective on the final draft of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, EMU. As far as France is concerned, we are satisfied with this outcome. This is particularly true given that France had already supported recent measures adopted by the EU to boost growth and reform governance - measures such as the euro plus pack, the legislative six-pack for economic governance, and the European semester. During this unprecedented crisis, we believe that the EU had no choice but to drastically reshape its structure of economic governance.
The draft treaty represents yet another step towards more effective management of the financial and economic crisis through a more efficient system of governance in the EU and particularly in the eurozone. Until now, EU governance was lacking due to a concentration perhaps on the common currency. The treaty, however, will strengthen the economic pillar of the economic and monetary union through enforcement of rules intended to tighten budgetary discipline.
In terms of tackling the crisis, the treaty will be a welcome addition to the European stability mechanism, ESM, and we believe that the ESM will prove to be an even stronger protective shield than the existing EFSF. France will provide, as members may know, about 20% of its funding - more specifically, over five years it will transfer €16 billion directly to the ESM and guarantee a further €143 billion in the long term.
While some are referring to this draft treaty as the "austerity treaty", we in France prefer to view it as a necessary complement to the ESM - a commitment on behalf of member states to fiscal responsibility. After all, if member states are in a position to enjoy the multiple benefits of solidarity with their European partners, they must also be committed to fiscal discipline and the maintenance of sound and sustainable public finances.
Members might remember that France has been a major proponent of tighter economic governance and the implementation of a fiscal golden rule at the national level. Furthermore, we advocate respect for the fiscal rules, something I acknowledge may have been overlooked in France in the past, most notably regarding the Maastricht criteria. Notwithstanding the current crisis, we continue to believe that economic and monetary union is an important historical process designed to bring real economic benefits to eurozone citizens and to member states planning to join the EMU in the future.
In order to maintain the stability of the monetary union over time and prevent other crises, concerted efforts to correct budgetary imbalances in a sustainable manner are essential. In that regard, I assure the members of this committee that France fully appreciates the efforts that have already been made in Ireland and acknowledges the courage of the Irish people in implementing austerity measures which have thus far resulted in reduced budgetary imbalances. Ireland's recovery programme is on track, as evidenced by the opportunity I had recently to visit financial institutions in Luxemburg where I heard very optimistic views regarding Ireland's ability to return to the markets in the near future.
Nonetheless, we believe that on the whole, further efforts are required at EU level to promote budgetary stability, a necessary basis for growth and job creation. The draft treaty provides the means to make this happen. In France we do not believe that this will lead to a two-speed Europe. On the contrary, we trust that European integration is deepening, while at the same time each country remains free to decide which level of integration it wishes to commit to, and according to its own national circumstances.
The ongoing European Council is also focusing on growth in our countries and we hope that its conclusions will set out concrete measures to boost growth and employment; measures that are essential in enabling our people to understand and accept the austerity imposed upon them and thus look to a better and brighter future, and not one of gloom and doom.
With regard to the implications of the treaty for France, as in Ireland, it will mean imposing tougher measures through a further reduction in public spending. As members will know, France adopted an austerity budget this year and our growth forecast for 2012 was lowered from an initial 1% provision to 0.5%. While some measures will not be easy to implement, my country already demonstrated its ability to anticipate the draft treaty in implementing a drastic reduction in the numbers of civil servants and very necessary reform of the French pension system. Austerity should not necessarily lead to recession, thus becoming counterproductive for our economies, and it is for that reason that France remains committed to working hard on growth boosting measures, at both national and European level.
In that regard, I would mention a few steps which have already been taken in France to foster growth in different areas. They include planned investment of €35 billion in higher education; initiation of a consultation process on environmental protection and the benefits of such to the economy; establishment of research and development tax credits for the private sector; and encouragement of investment from SMEs through a specialised agency, which offers financial support to small and very small French firms.
At European level, France is already working in three sectors, an experience we are willing to share with our European partners. We are committed to supporting industry and new technologies in particular; increased employment of seniors; and in order to increase productivity, an increase in the number of training schemes, especially for our young people.
As members know, France has entered an election period. Whatever the results might be and given the current context, my feeling is that the incoming government will have to continue working to restore public confidence in the EU's ability to deal with the crisis and acknowledge that solidarity means discipline and real efforts to boost the dynamism of our economy.
I thank the Chairman once again for his kind invitation. A number of his colleagues from the Dáil, led by the Ceann Comhairle, recently travelled to Paris where they participated in very fruitful visit to our Assembly and Senate. They met, among others, the Chairman's counterparts, and I hope that during the next parliamentary session, he will have the opportunity to meet his French colleagues at the Committee on European Union Affairs. I thank the members for their attention.