Thank you very much, Mr. Chairman, for the opportunity to speak to the joint committee about the multi-annual financial framework, or MFF, and heading 4 of the MFF, which is entitled Global Europe, and deals with the external action instruments of the EU.
I will begin by giving an overview of the MFF process, including a snapshot of where we are now, the work envisaged under the Cypriot Presidency, and a best guess at what might fall to our own Presidency.
I will also speak about some of the external action instruments under consideration. I will then hand over to my colleague, Mr. Colin Wrafter, to speak about the instrument for stability and the human rights instrument. Finally, my colleague, Mr. Michael Gaffey, will elaborate on the proposals for the development instruments under and outside the MFF.
The MFF process involves three main partners - the Commission, the Council and the European Parliament – and is broken down into three main stages. The first stage is the proposal by the European Commission for a budget for the next multi-annual financial period of 2014-20. The Commission published its broad proposals on 29 June 2011. This communication, entitled A Budget for Europe 2020, proposed five main budget headings, the fourth of which, Global Europe, is focused on the EU's external action instruments.
The total budget proposed by the Commission is €1,025 billion for the MFF, with an additional €58 billion outside the MFF. The vast bulk of this is proposed for headings 1 and 2, essentially CAP and cohesion, respectively.
The budget communication was followed by specific proposals for a number of financing instruments, through which the budget will be spent. In the case of heading 4, the Commission published proposals for ten instruments on 7 December 2011.
The second stage is consideration of all these proposals by the Council with a view to agreeing a Council position. Responsibility for considering and agreeing on the overall MFF package lies with the General Affairs Council, with a final agreement being endorsed by the European Council.
Last December, the European Council called for the Danish Presidency to aim to develop a basis for the final stages of negotiations, to be discussed at the European Council in June 2012. The Commission has emphasised the need to have the MFF agreed by the end of this year so as to allow them sufficient time to begin programming for 2014.
Assuming that the Danish Presidency succeeds in its aim of having agreement on the proposals at the June European Council, this will allow us to proceed to the third or final stage of the process, which is negotiation with the European Parliament. The Cypriot Presidency will bring this forward. The key red-line issues in finalising a deal are likely to be on the overall size of the budget, the relative share of the CAP and cohesion, and the rebate arrangements.
At the present moment we are working with partners to reach a common Council position on the Commission's proposals which would then be presented to the Parliament as the Council's negotiating position. However, I should point out that agreement on the figures to be allocated to each of the headings will not be agreed until the very end of the process. For the moment, we are seeking agreement on how the money will be spent, not on how much of it there will be to spend.
The Cypriots are already preparing to take over the next stage of the process and I have confidence they will do everything in their power to finalise the negotiations with Parliament before the end of the year. However, these negotiations are complex and have to traverse a number of stages. It may be the case that the completion of the negotiations with the European Parliament and the finalisation of the MFF will fall to the Irish Presidency. We are preparing for that eventuality.
In addition to the negotiations on the overall MFF package, its principles and parameters, discussions are ongoing on the individual headings and the instruments that make them up. As regards external action, the Lisbon treaty saw an enhanced role for the EU on the international stage with the creation of the European External Action Service, the aim of which is to have the EU speak with one voice and so ensure that our influence is commensurate with our external action funding and our geo-political position, which has not always been the case. In so doing, the Commission has made a case for an increase in funding for heading 4 from €56 billion, in 2011 prices, to €70 billion - an increase of 20%. This figure accounts for around 6% of the proposed multi-annual financial framework, MFF, package. There is a further €32.7 billion of outside MFF expenditure for the European development fund and the emergency aid reserve.
In its proposals for funding, the Commission has focused its actions in support of the EU's guiding principles of democracy, the rule of law, human rights and fundamental freedoms, human dignity, equality and solidarity, and respect for the principles of the United Nations Charter and international law. This has always been the focus of the funding under this heading so it is not surprising the structure and instruments of heading 4 are broadly similar to the current MFF, although they have been adapted to a changing world and a changing EU.
Before addressing the individual instruments, I would like to say a few words on the amounts of funding proposed under the MFF. The funds in the MFF package are not under negotiation at present and will not be agreed until the end of the process. All the signs are, however, that there will be strong pressure to reduce the overall MFF package by as much as 10%. In this case we can expect to see a reduction in the amount allocated for external action. In such a scenario, decisions may have to be made on which instruments Ireland wants to see protected, and which we are willing to see cut. These are not easy decisions as there are merits in all the instruments and all contribute to the overall goals of the EU and of Ireland's foreign policy.
The main tenet of our foreign policy is our commitment to peace, justice, human rights and fairness in international relations. These are all goals that are promoted through the external action instruments. We also have to consider both our development policy, which prioritises poverty reduction, and the potential that some of the instruments have to leverage for improved trade opportunities for Irish businesses. These are all matters which are still under consideration and we would welcome hearing the committee's views as the process moves towards its conclusion.
Moving on to the individual instruments that make up the heading 4 package, the first proposed is a common implementing regulation. This is a new and welcome departure. The EU has often, and rightly, been criticised for the complexity of its administrative process that discourages eligible applicants from applying for funding. The common implementing regulation aims to have one set of rules for seven of the external action instruments, thus simplifying its spending programmes to reduce the administrative burden and costs for their beneficiaries and for all actors involved.
The instrument for pre-accession assistance, or IPA, serves to underpin the EU's commitment to enlargement. Its main objectives are to help candidate and prospective candidate countries meet the Copenhagen criteria through support for political, economic and social reforms. In this way the funding will help to strengthen the ability of beneficiary countries to fulfil the obligations stemming from membership. The funding provided tries to mirror the Structural Fund, the Cohesion Fund and the European agricultural fund for rural development and thus it also give candidates some experience of managing these types of funds.
Some of the key changes proposed from the current instrument include the introduction of multi-annual budgeting and the adoption of comprehensive country strategies to better match funding with needs and priorities. This would also see a move towards financing programmes rather than individual projects. The proposals also include a performance reserve to allow a so-called more for more strategy to be pursued where performance warrants this.
The European neighbourhood instrument will be the channel through which the bulk of EU assistance to neighbouring countries will be provided. It will support the European neighbourhood policy and bilateral partnerships with countries to the east and south of the EU. The new instrument will take account of a number of major developments since the launch of the ENP. These include the adoption of a new ENP vision in June 2011 which calls for greater support for partners committed to building democratic societies and undertaking reforms in line with a more for more principle. This will allow for more funding to be allocated to those countries making greatest progress on reform. The regulation also seeks to recognise the new status of the EU's relationship with Russia, which is now a strategic partner. Co-operation will continue under the new regulation in the area of cross-border co-operation and multi-country programmes, with Russia co-financing projects along its border with the EU.
The new partnership instrument aims to advance and promote the EU's values and interests abroad and to give the Europe 2020 strategy a global dimension. It will allow the EU to respond in an effective and flexible manner to opportunities arising from our relations with partner countries and to address collectively global challenges such as climate change, energy security and the environment. Although there will be a focus on strategic partners and emerging economies, the instrument will be global in reach. It also aims to help European companies by improving market access and developing trade and investment opportunities by means of economic partnerships and business and regulatory co-operation.
The last two instruments I will mention are the nuclear safety instrument, for which the Department of the Environment, Community and Local Government takes the lead, and the Greenland instrument. The nuclear safety instrument can be used for all third countries but prioritises pre-accession and neighbourhood countries in particular. It aims to promote a nuclear safety culture, including safe management of spent fuel and radioactive waste. The Greenland instrument is a new instrument, introduced now as a result of the changing nature of the EU's relationship with Greenland. This instrument proposes a revised partnership between the EU and Greenland that would take into account the geostrategic importance of Greenland in the context of global issues such as climate change and natural resources.
I will now hand over to my colleague Colin Wrafter.