The European Council will meet in Brussels on Thursday and Friday this week. This summit will be the fourth and final such meeting to take place while we have held the chair of the Council of the European Union. The meeting will take place over our final two working days as holder of the Presidency. It will serve as a most welcome opportunity for me to update my colleagues on the broad range of achievements which, through their co-operation and engagement, have been possible on our watch.
I am proud of the job that Ireland has done over the course of the last six months. Whether it was in brokering agreement on key elements of the banking union, advancing agreement with the European Parliament's negotiators on the multi-annual financial framework, MFF, or the reform of the Common Fisheries Policy, our officials and Ministers have distinguished themselves over the course of this semester. Not only have we achieved a great deal, but we have conducted the Union's work in a positive, open and engaged manner. We have considerably added to the restoration of Ireland's reputation as a serious and engaged partner within the European Union and on the world stage. I believe that this, our seventh time to hold the Presidency, is an experience that both the European Union and Ireland can be justly proud of.
This week's meeting of the European Council will, first and foremost, concentrate on overcoming the scourge of excessive youth unemployment. Given the situation here, I wholeheartedly welcome this clear focus for our deliberations this week. It is both fitting and timely. Hand in hand with this, leaders will consider how best to improve access to finance for the real economy across Europe, particularly for the SME sector, which is a key driver of employment, growth and jobs. To this end, I expect we will launch a new investment plan, which will build upon financing to be made available through the next multi-annual financial framework and from the European Investment Bank, including on the basis of the recent increase in its capital. Leaders will also take stock of the implementation of the Compact for Growth and Jobs, one year on from its adoption. While progress has been made in delivering various measures under the compact, it is clear that more remains to be done.
This meeting of the European Council will see the conclusion of the European Semester process for 2013 with the endorsement of a series of country-specific recommendations. I warmly welcome the priority that I expect the European Council will ascribe to the completion of banking union. This is an issue to which, as holder of the Presidency and nationally, we have given top priority. This week's meeting will also take stock of where we are on strengthening economic and monetary union, a process that President Van Rompuy has been working on, with our close collaboration as holder of the Presidency. More remains to be done on this before it is ripe for decisions to be taken. During a meeting that will be an extremely busy one, we will also consider this week issues related to EU enlargement, the EU's relations with its strategic partners and the expansion of the euro area to include its 18th member - Latvia - from the beginning of next year, a development I welcome.
I am satisfied that, as points of particular focus for this meeting of the Council, President Van Rompuy has highlighted the two key issues of youth employment and financing the economy, especially the SME sector. I expect we will agree concrete measures in both of these areas, which are, of course, interrelated.
The most recent EUROSTAT data show there was a further fall in the Union's employment levels in the first quarter of 2013, and there are now more than 26 million people unemployed in Europe. Ireland is one of 11 member states in which the underlying employment trend is positive. It is clear that the painful adjustments we are making at national level are beginning to show tangible, if still modest, results. That is why we can be confident that this year, 2013, will mark our return to net employment growth for the first time since 2007. However, as long as anyone who wishes to work remains without a job, those numbers will remain too high.
At EU level, there is a bleaker picture. European employment numbers have been falling since the end of 2011 and the euro area has now experienced six successive quarters of declining economic output. The reality is that the key risk to the economic outlook in Ireland and beyond is the fragility of the wider EU economy. This is why we set a clear course at the end of last year for an Irish Presidency that would underpin recovery in the real economy and a return to net employment growth. The most recent forecasts are now for a modest pick-up in economic activity in the second half of this year.
I am greatly encouraged that we will this week agree a series of concrete measures to combat youth unemployment. These include speeding up and front-loading disbursements under the youth employment initiative in order that it will be fully operational from the beginning of next year and in order that the disbursement of the €6 billion allocated to it under the next MFF can happen over the first two years - 2014 and 2015 - of the MFF. Member states benefiting under the youth employment initiative, including Ireland, will be asked to develop implementation plans before the end of this year for the youth guarantee, as agreed under the Irish Presidency in February.
Leaders will also highlight the importance of mobility within the Single Market, including through the Your First EURES Job programme and appropriate use of European Social Fund allocations. The ERASMUS+ programme, which supports cross-border mobility schemes, is to be fully functioning by the start of next year. The agreement, during our Presidency, on the recognition of professional qualifications will make a real and substantial difference to the mobility of workers across Europe. Apprenticeships and other work-based learning opportunities are also to be promoted.
The scale and seriousness of the issues surrounding youth employment are such that we will engage with all stakeholders in this area. To this end, leaders at the European Council will hear from social partners ahead of the formal meeting of the Council, and the social partners will present their framework of actions on youth employment, which they adopted earlier this month. I look forward to that exchange.
Closely related to getting to grips with youth unemployment is the need to improve the financing of the real economy. While financial markets have calmed considerably, the most recent ECB lending surveys show that aggregate business lending continues to contract. There is also clear evidence of financial market fragmentation, undermining the potential for new investments where they are needed most. Thus, it is crucial that we work to restore normal lending conditions. In addition to the need to keep to our agreed timelines on banking union, it is clear that more immediate measures are also needed. Business access to finance remains a bottleneck that we must address more effectively. It is in this context that leaders will this week launch a new investment plan which will build upon and leverage the funding to flow from the Union's budget - the next MFF - along with the enhanced lending capacity of the EIB on foot of the increase in its capital. A joint Commission-EIB report which was published last week indicates that the €10 billion capital increase provided for in the Compact for Growth and Jobs is allowing for new lending targets in the EU of €62 billion in 2013 and €182 billion for the period 2013 to 2015. This is an expansion of just under 50% on the pre-capital increase business plan. In the first five months of this year, project signatures are already up by an average of 66% on the corresponding period last year, which is to be welcomed. The report estimates that this year project signatures in Ireland will reach €650 million, up almost 30% on 2012. The April visit to Ireland by the EIB's president, Mr. Hoyer, and his senior management team saw the reopening of the PPP market here for the first time since 2007 and the announcement of €200 million in new credit lines for small and medium-sized enterprises, to be delivered via AIB. We believe there is further room for improvement in the quantum of EIB support for Ireland, and I assure the House that the Ministers for Finance and Public Expenditure and Reform, Deputies Noonan and Howlin, continue to engage closely with them in this regard.
The report confirms that the Commission and the EIB are working with the ECB to develop an EU strategy to alleviate business financing constraints. These discussions focus on reviving structured credit markets to support SME lending in particular. I look forward to hearing the views of President Barroso, Mr. Hoyer and Mr. Draghi in this regard. Beyond this potential for a short-term asset-driven EIB-ECB initiative, the Commission and the EIB have presented options for developing a new joint risk-sharing instrument that would blend resources from the new MFF with EIB lending capacity. This joint instrument would be used to guarantee dedicated credit lines specifically earmarked for the SME sector. I look forward to our discussions on these options, including presenting Ireland as an ideal pilot for the further development of proposals here.
The management of the third European semester cycle of economic policy co-ordination has been an important Presidency activity in the past six months. We have been working hard to improve dialogue within the Council and to strengthen ownership of proposed national reform measures. Our goal has been to ensure that all relevant Council formations worked in a co-ordinated and consistent manner towards a thorough preparation of the March and June European Councils. The stronger fiscal rules now in place, including our finalisation of the two pack, are also supporting a more balanced emphasis on the structural soundness of public finances. The process has worked well. I expect the June European Council will settle, without controversy, clear, country-specific recommendations for the national budget cycles across the European Union in the second half of the year.
Regarding the compact for growth and jobs, progress has been made on implementation of the various measures, but it is evident that much more remains to be done. During our Presidency we have also made solid progress across a range of files critical to delivering on the compact, including on the single market, the digital single market and innovation. Importantly, we will return to take the pulse of the compact on the basis of a progress report to the December European Council. I am particularly gratified that this week's European Council will recognise the breakthrough made on EU-US trade, with the agreement of an EU negotiating mandate earlier this month. This was a very high Presidency priority and I want to pay tribute to the Minister for Jobs, Enterprise and Innovation, Deputy Bruton and his team on their role in ensuring the launch of negotiations on a transatlantic trade and investment partnership, TTIP.
I expect that leaders will this week identify completing banking union as a short-run key priority. That is a position which Ireland, as Presidency and nationally, has tirelessly advocated. I welcome the very considerable progress which has been made since January, especially on the capital requirements directive, CRD IV, and the single supervisory mechanism, SSM. The Minister for Finance, Deputy Noonan will chair a further meeting of ECOFIN tomorrow, with a view to progressing the bank resolution and deposit guarantee aspects of banking union.
The bank recovery and resolution, BRR, proposals set out the framework for how banks in distress are to be resolved. This is a further key step towards completing banking union and ensuring the breaking of the link between sovereigns and banks. In the coming days, the Commission will bring forward a proposal for a single resolution mechanism, SRM, to co-ordinate the application of resolution tools to banks. This should be a natural complement to the establishment of the single supervisory mechanism.
One of the key lessons learned from the euro area crisis is that monetary union must be linked with greater fiscal and economic convergence. As agreed at the EU summit last December, a number of issues on deeper integration of the economic and monetary union, EMU, including ex ante policy co-ordination and the idea of contractual arrangements, have been examined by President Herman van Rompuy. The Irish Presidency has been centrally involved in assisting him through this process, particularly by facilitating a series of consultations across a range of Council formations. President Van Rompuy will present his road map to this week's European Council, but it is expected that time for further reflection will be agreed so that leaders can return to these issues again in October and December.
This month's European Council will also discuss enlargement. Today, at the general affairs council, GAC, under the chairmanship of the Tánaiste, important decisions will be taken on the next steps on the EU paths of Serbia and Kosovo. I hope to see the GAC recommend to the European Council that the EU open accession negotiations with Serbia. The GAC will also take a decision on opening negotiations on a stabilisation and association agreement with Kosovo. I am delighted that these important decisions are being taken during the Irish Presidency. We have prioritised a credible enlargement process, based on the principle of conditionality. The past few months have seen developments in Serbia-Kosovo relations that are no less than historic. The engagement of both countries, including the agreement reached in April, is a testament to the political courage of both Prime Ministers, to the tireless efforts of High Representative Catherine Ashton, and to the potential of enlargement to transform the lives of the people of Europe for the better. It is fitting that the EU now recognises these efforts by agreeing that Serbia and Kosovo should move forward on their individual paths to EU accession.
While this week's summit has an extremely packed agenda, we will be focused on issues central to Ireland's Presidency priorities of stability, jobs and growth. Combating youth unemployment and the facilitation of the real economy through access to finance for SMEs, will be at the top of our agenda. This meeting is all about making a real difference, through concrete measures, to employment and growth across the EU. I will, again, hope to play an active and positive role, as Ireland's representative and as President of the Council, on each of our agenda items at the end of this week. I will, as is our practice, report back to the House following this meeting of the European Council.