Gabhaim mo bhuíochas leis an gCathaoirleach agus as ucht an cuireadh a bheith anseo ar an lá iontach seo. I am pleased to be back again this week, ahead of the General Affairs Council which is due to take place on St. Patrick’s Day and will discuss the European semester 2015. The March General Affairs Council will prepare for the meeting of the European Council which is due to take place on 19 and 20 March. The European Council will have three agenda items: energy union; the European semester, which discussion will include a broad exchange of views on the economic situation in the European Union; and external relations. The external relations component will focus on relations with Russia and the conflict in Ukraine, as well as the forthcoming Eastern Partnership summit in Riga, Latvia, and the deteriorating situation in Libya. In addition to preparing for the European Council, the General Affairs Council will consider the 2015 European semester and inter-institutional issues.
Before I look ahead to next week’s meeting, please allow me to update members briefly on the outcome of the February meeting of the General Affairs Council. The Latvian Presidency presented the outline of its priorities for the semester, highlighting a focus on boosting investment, energy union, trade, the digital agenda and the Eastern Partnership. The Council also engaged in a comprehensive discussion on counter-terrorism. The renewed focus on this issue followed, of course, the tragic attacks in Paris in January. The Council took stock of various measures advanced within the European Union to combat terrorism, ahead of a joint statement by EU Heads of State and Government later that week.
The Presidency presented the state of play on a proposed technical amendment to the Multiannual Financial Framework, MFF, regulation.
The Council also noted the annotated agenda for the March European Council and had a brief exchange of views. Ministers present had a working lunch with Commission First Vice President, Frans Timmermans, during which a broad range of issues relating to the Commission’s work programme for 2015 were debated, including better regulation and inter-institutional relations.
I will now turn to the March General Affairs Council. The meeting will focus primarily on preparations for the European Council. The first issue to be discussed is energy union. Geopolitical events, worldwide energy competition and the impact of climate change have all prompted a focus on securing the Union’s energy future.
The Council discussion will be shaped by the recent communication from the Commission on a framework strategy for a resilient energy union with a forward-looking climate change policy. Ireland very much welcomes this communication, which sets out a roadmap for assuring secure, affordable and climate-friendly energy across all member states. Among a number of initiatives, the Commission has set out plans to enhance regional co-operation, introduce new legislation to ensure supply of electricity and gas, increase EU funding for energy efficiency, and report annually on the state of the energy union.
It is anticipated that the European Council deliberations will focus on two key aspects of the energy union project, namely, enhancing energy security and reaping the benefits of the internal energy market. Given the centrality of energy policy to achieving our climate change ambitions, there will also be an exchange on how best to co-ordinate our diplomatic action in order to increase the Union’s leverage and effectiveness ahead of the critical climate conference in Paris next December. It is important that we act effectively to ensure that other states match the ambitious goals agreed last year by the Union.
Enhancing Europe’s energy security is essential for peripheral, poorly connected member states, of which we are one. Diversifying the routes and sources of our energy, and putting in place adequate infrastructure to support this diversification, will be necessary to meet our energy challenges of the future.
Developing indigenous resources, particularly in the area of renewable energy, will be also very important for increasing security of supply. The energy union strategy will seek to ensure that Europe retains its leading global role in renewable energy. Ireland has one of the best offshore renewable energy resources in the world, particularly wave energy, and Irish researchers and entrepreneurs are at the forefront of technological developments in this sector, particularly in the marine centre in Ringaskiddy in Cork. I recently witnessed this first hand with my French counterpart, Harlem Désir, to when we visited Ringaskiddy, UCC and the Irish Maritime and Energy Resource Cluster. The visit exemplified the energy union in action. We also explored opportunities for co-operation between Ireland and France in the area of renewable energy, and discussed a possible submarine electricity interconnector between Ireland and France. Both countries of course have very large coastlines and have marine resources in that regard.
There are currently three external relations items scheduled for discussion at the European Council. These are relations with Russia and the situation in Ukraine; the Eastern Partnership; and developments in Libya. Developments on the ground in Ukraine will shape the European Council discussions both on Ukraine itself and on broader EU relations with Russia. In particular, progress on implementation of the 12 February Minsk agreement will be reviewed. After a troubled beginning, the ceasefire in eastern Ukraine appears to have taken hold. Prisoner exchanges have taken place and both sides have begun withdrawing heavy weapons from the front line.
This is welcome. However, the situation remains tense and fragile. It is crucial that the OSCE monitoring mission is given full and unhindered access to all areas of the conflict zone, so that it is in a position to definitively verify that weapons have been withdrawn, and confirm the locations to which they have been taken.
The question of further economic sanctions is likely to be a feature of the European Council discussions. Following consultations with EU member states and a subsequent video conference with France, Germany, Italy, UK and US, President Tusk stated on 3 March that leaders had underlined the close linkage between sanctions and the full implementation of the Minsk agreements, making it clear that the EU was ready to take further measures if the agreements were further violated. Ireland has consistently favoured the dual-track approach adopted by the EU, involving both political dialogue and robust sanctions, with a view to bringing an end to the conflict that has claimed over 6,000 lives and caused untold hardship. I will have an opportunity to hear the Ukrainian perspective directly when, together with EU colleagues, I will meet with Ukrainian Foreign Minister Klimkin in the margins of the Foreign Affairs Council next week.
The European Council will hold an orientation debate ahead of the Eastern Partnership summit, which will be held in Riga on 21 and 22 May. The Eastern Partnership aims to enhance the EU’s relationships with Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. The summit will allow the EU and its eastern partners to take stock of developments in the Eastern Partnership since the last summit in Vilnius in 2013, and to consider the path ahead. The summit will offer the opportunity, in particular, to assess initial progress by Georgia, Moldova and Ukraine in the implementation of their EU association agreements, with assistance provided by the EU. The Dáil approved the terms of the agreements on 28 January, after a debate and consideration of the agreements by the Select Committee on Foreign Affairs and Trade. This paves the way for their ratification by Ireland, which will be completed before the Riga summit.
The European Council will also discuss the situation in Europe’s southern neighbourhood, specifically in Libya, and consider the implications for the security of the EU, in terms of illegal migration and terrorist threats. Recent months have witnessed a number of factions competing for political legitimacy and seeking control of Libya’s cities and its infrastructure. The vacuum of effective state control has been exploited by terrorist groups such as ISIS with devastating results. The conflict is also creating a growing humanitarian crisis in much of the country. A UN-facilitated talks process is now seeking an inclusive political agreement which would lead to the formation of a government of national unity, a ceasefire and the finalisation of a new constitution for Libya. The EU is fully supportive of these efforts.
The European Council will discuss the economic situation in the EU and conclude the first phase of the 2015 European semester. While economic developments were disappointing for most of last year, we are now seeing some signs of a more positive economic outlook for Europe. The year 2015 is the first since the onset of the crisis in which all member state economies are expected to record economic growth. Importantly, this more positive economic outlook is also beginning to feed through to Europe’s labour markets. The seasonally-adjusted unemployment rate in the Union was 9.8% in January, the second consecutive month that it was back in single figures. We do, however, need to bear in mind that this figure masks significant regional variations – and that youth unemployment, in particular, remains a formidable challenge.
The committee asked me to provide a brief update on the situation in Greece. On 20 February, agreement was reached among the Finance Ministers of the euro area to extend the Greek programme by up to four months.
This is a welcome development, which demonstrates Europe’s solidarity in supporting Greece until it has regained full market access. The purpose of the extension is to allow a successful conclusion of the fifth review of the Greek programme, the disbursement of the associated funds and discussions on a possible follow-up arrangement. As part of the agreement, the Greek Government has presented its proposals for reform measures. These measures will now need to be further specified and then agreed with the institutions by the end of April. Yesterday, the Eurogroup discussed procedural issues relating to the negotiations. It was confirmed that technical negotiations between the Greek authorities and the institutions would commence tomorrow in Brussels. Ireland, together with other euro area member states, understands and empathises with the difficult situation faced by the Greek people. This is why there has been a willingness to negotiate a way forward which takes account of the realities of the situation in Greece and the political priorities of its new Government, while also respecting existing commitments.
I will return shortly to consider the European semester, but first allow me to finish on the General Affairs Council agenda. Over lunch, Ministers will discuss how the Council might contribute to a revision of the 2003 inter-institutional agreement on better law making, on which the Commission is expected to issue a proposal later this year. The objective of such a revision would be to update and enhance existing arrangements for inter-institutional co-operation, in order to improve the legislative process and, ultimately, deliver better outcomes for our citizens. While no decision will be taken at this juncture, I look forward to a productive discussion which will advance our goals of strengthening inter-institutional co-operation and delivering better regulation.
I will now focus the remainder of my statement on the European semester for 2015. The March European Council will conclude the first phase of the European semester by providing guidance to member states for submission in April of their stability programme updates, under the Stability and Growth Pact, and national reform programmes. I expect that there will be strong political reinforcement of the key priorities set out by the new Commission in the annual growth survey it presented in November – that is, a boost to investment; a renewed commitment to both national and EU-level structural reforms; and continued fiscal responsibility.
The Commission is also due to present proposals this year for an improved and updated Europe 2020 strategy. This means making sure we have the right post-crisis arrangements in place for supporting growth and jobs across Europe. The Commission’s preparations in this regard will of course be informed by the public consultation to which the present committee made a contribution in November, as was reviewed when I attended the Seanad last week.
The Commission’s proposals for a renewed Europe 2020 process have been deferred until later in the year, keeping the political focus before the June European Council on getting the new "Juncker investment plan", as it is known, up and running. Progress in establishing the European fund for strategic investments remains firmly on track. Indeed, finance Ministers are due to agree today a general approach on the draft regulation, allowing negotiations to open with the European Parliament.
On 26 February, the Commission presented a comprehensive assessment for each member state, under the 2015 cycle of the European semester. There is now a window of more than two months before draft proposals for the next round of country-specific recommendations are produced by the Commission on 19 May, for adoption subject to amendment by the Council. This is a significant procedural improvement introduced for this year’s process that is designed to support stronger national-level engagement with the Commission’s assessment, including by key stakeholders and national parliaments and committees. In Ireland’s case, the assessment in the new country report is a broadly positive one, reflecting the strength of the economic recovery under way, supporting in turn a gradual unwinding of the deep imbalances developed during the crisis period.
It is worth recalling that we are only one of five member states whose budgets were found by the Commission last November to be fully compliant with the provisions of the Stability and Growth Pact. The country report strongly commends the progress we have made in recent years, noting that Ireland was the fastest growing economy in the EU in 2014, with that growth expected to continue in the coming years. It notes in particular that recovery has been jobs rich and recognises that public sector indebtedness declined in 2014, public debt is on a downward trajectory, financial sector challenges are diminishing, external accounts have strengthened considerably and the labour market situation has improved.
The purpose of the report, while recognising progress, is to identify where further work is needed or weaknesses or imbalances remain. The Commission does this in respect of every member state. Among the areas for further work, the Commission includes the need to continue to pay attention to unemployment, especially long-term unemployment. As the committee is aware, this is a key priority for the Government. The Commission also points to the need to ensure that small to medium-sized enterprises, SMEs, can access the finance they need. In this regard, the Government has recently put in place the Strategic Banking Corporation of Ireland.
The report assesses progress implementing our 2014 country-specific recommendations, CSRs. As committee members will be aware, Ireland received seven CSRs last year. These covered public finances, health care spending, active labour market policies, social inclusion, access to finance, non-performing loans in the financial sector and legal services. Progress is broadly on track and consistent with policy directions already firmly established at national level.
Preparation of Ireland's national reform programme, NRP, for 2015 is under way. It will formally report on the progress in implementing our CSRs as well as progress towards our Europe 2020 targets in the areas of employment, research and development, climate change and energy, education and social inclusion. The NRP will also set out the macroeconomic context, which is further elaborated on in our stability programme update, which is due for presentation to the Commission in April.
I look forward to hearing the views of the committee on the semester process and the key priorities and challenges that might be reflected in this year's NRP. Similarly, views are being sought from a wide range of civil society stakeholders. It is important that engagement with the European semester be supported and national ownership be encouraged. Last year, my predecessor, the then Minister of State, Deputy Donohoe, presented a draft of the NRP to the committee for discussion and consideration before submission to the Commission. If the Chairman is agreeable, I would be delighted to return to the committee to discuss our draft of the NRP in the coming weeks or April. I thank members for their attention during what was a reasonably long speech and look forward to whatever comments or questions they may have.
