JOINT COMMITTEE ON EUROPEAN UNION AFFAIRS díospóireacht -
Thursday, 12 Jan 2012

Priorities for Danish EU Presidency: Discussion with Danish Ambassador

Vice Chairman

The committee is in public session. I remind all members to ensure mobile phones are switched off. I acknowledge apologies from Deputy Joe O'Reilly. I note and congratulate our former Chairman, Deputy Joe Costello, on his elevation to Minister of State at the Department of Foreign Affairs and Trade with responsibility for trade and development. I understand the Minister of State may look to join the committee meeting later and we can reserve any comments until then.

The first item on this morning's agenda is a discussion of the priorities of the Danish EU Presidency programme and I welcome the ambassador of Denmark to Ireland to our meeting. I apologise to him for the delayed start to the meeting as there had been a number of votes in the Dáil.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they are to give this committee. If a witness is directed by the committee to cease giving evidence in relation to a particular matter and the witness continues to so do, the witness is entitled thereafter only to a qualified privilege in respect of his or her evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and witnesses are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against a person outside the House or an official by name in such a way as to make him or her identifiable.

I invite His Excellency, Mr. Niels Pultz, to make his opening remarks.

H.E. Mr. Niels Pultz

I thank the committee for inviting me to this session to present the programme of the Danish EU Presidency. The programme was launched last week under the heading of Europe at Work.

I wish to extend my congratulations to the outgoing Polish Presidency and Polish colleagues here in Dublin, for having run a truly professional and successful first Presidency. We are grateful for the co-operation that we have experienced so far with Poland and Cyprus, united as we are in a trio-Presidency.

Last September, I had the honour to be present at a meeting of this committee with my Polish and Cypriot colleagues. On that occasion I mentioned that this Presidency marks our seventh since joining the then Common Market in 1973. Last week, the Danish Government presented the Presidency programme to the public under the heading Europe at Work. All relevant information regarding the Presidency and the programme is available on eu2012.dk. As we speak, the European Commission has just ended its visit to Copenhagen, where it had discussions with the government about the programme and the tasks for the next six months.

It is our ambition to conduct an open, accessible and professional Presidency dedicated to achieving results within the scope of responsibilities of the rotating Presidency as outlined in the Lisbon treaty. Denmark takes over at a time when the EU faces the greatest challenge in its history - as stated also by President Barroso yesterday in Copenhagen - not least regarding the economic situation and the debt crisis. It is important that the EU does not fragment. By putting forward an agenda focusing on concrete results for Europe, notably in the legislative process, the Presidency will do its utmost to show that the EU is still capable and ready to take all the decisions needed to move beyond the crisis and demonstrate the value and necessity of European co-operation. We will do so in close co-operation with the European Parliament, the Commission, the President of the European Council and the High Representative.

The Presidency programme is divided into four main areas. The first area is what we call a responsible Europe. The economic and financial situation and notably the European sovereign debt crisis will be high on the agenda. The decisions of the European Council on 9 December last year to strengthen fiscal discipline and ensure economic stability are now being negotiated with a view to implementation in the coming months. The aim of these decisions is in line with the goal to ensure a more responsible Europe. Furthermore, the Presidency will focus on implementing the agreements reached at the summit in October 2011 as well as the recently agreed reform of economic governance in order to implement the first full European semester under the new rules. Implementing stronger financial regulation will also be important. Moreover, the negotiations on the future multiannual financial framework for the period beyond 2013 will be a major task for the Danish Presidency. It is our ambition to move forward the negotiations as far as possible in order to prepare for an agreement by the end of 2012. The view of the Danish Presidency is that the EU budget constitutes an important tool to finance common policies of the European Union, with the aim of creating growth, jobs and improved competitiveness. At the same time, the EU budget should focus on the areas where the EU can make a difference and underpin the efforts of overall budgetary consolidation in the EU and its member states.

The second main area relates to a dynamic Europe. The objective of the Danish Presidency will be to continue the development of the Single Market in order to achieve its full growth potential. As committee members will know, the Single Market will celebrate its 20th anniversary in 2012. It is our ambition that Europe returns to growth and higher employment in both the short and long term. The Single Market is a cornerstone of EU co-operation which over the past two decades has tied Europe together and created increased growth and prosperity. More than ever we need a sustainable Single Market that creates jobs and prosperity for workers and companies. The Danish Presidency intends to work to move forward as far as possible the 12 key initiatives set out in the Single Market Act. Special emphasis will be on the directives on public procurement, the standardisation package, revision of the accounting standards, the venture capital proposal, the common European patent system and better enforcement of the posting of workers directive. We hope to achieve significant progress towards a digital Single Market and will strive for concrete results in the negotiations on, for instance, the roaming III regulation.

It is also our ambition to see efficient trans-European infrastructures as fundamental for the smooth operation of the Single Market, for the mobility of persons and goods as well as for the economic, social and territorial cohesion of the EU. Therefore the negotiations on the connecting Europe facility and the revision of sectoral guidelines will be important issues to the benefit of well-functioning transport, energy and ICT networks across the EU. Another area of focus will be the future framework programme for research and innovation, Horizon 2020, with the aim to strengthen European research and innovation. The Danish Presidency will also work towards opening new trade opportunities for European companies, both through the WTO and through bilateral trade agreements with, among others, Japan, India, Canada and Tunisia.

We call the third area a green Europe. Economic growth and environmental protection can and must go hand in hand. The EU has established itself as a global leader in the areas of environment, energy and climate, but a continued effort is required to maintain this headstart. In the context of the current economic difficulties, new balanced measures related to energy, climate and the environment can contribute to much needed growth and employment in Europe. Green growth can be encouraged by integrating such efforts across a range of European policies, including the agricultural policy, the cohesion policy, transportation and the Single Market. In order to contribute to fulfilling Europe's 20% target of primary energy savings by 2020, the Danish Presidency will focus on the proposal for a new energy efficiency directive as a follow up to the European Energy Efficiency Plan 2011. Furthermore, the Danish Presidency will work on establishing a long-term strategy towards 2050 in the area of energy and climate, building upon the energy road map and low carbon economy communications. Other important issues include energy infrastructure and the proposal for setting up an information exchange mechanism with regard to intergovernmental agreements between member states and third countries in the field of energy, the 7th environmental action programme and the preparation of the Rio+20 UN conference on sustainable development.

The fourth area we call a safe Europe. European co-operation is essential in order to deal with the cross-border challenges of a globalised world and to ensure the safety and interests of European citizens. The continued implementation of the Stockholm programme, 2010-14, will be a key task in the area of justice and home affairs. In order to better manage migration from third countries, the importance of which has been underlined by recent developments in the southern Mediterranean and the southern and south-eastern external borders, the Danish Presidency will continue the efforts to finalise the common European asylum system, CEAS, before the end of 2012 and thus aim at tangible results on the proposed amendments to the asylum procedures directive, the reception conditions directive, and the revision of the Dublin regulation and the Eurodac regulation. In this context we also put emphasis on consumer protection, for example food safety, with common rules to be respected from farm to fork, as well as the fight against cross-border health threats.

As new global powers are emerging, there is a need for a stronger common European role on the global scene. With the establishment of the position as High Representative for Foreign Affairs and Security Policy and a Common European External Action Service, EEAS, the Lisbon treaty has provided the EU with a valuable new basis for achieving increased global influence. The Danish Presidency intends to support the High Representative and the EEAS in fulfilling the ambitions of the Lisbon treaty.

Finally, with regard to enlargement, which was the single most important theme during our last Presidency in 2002, we will continue a policy based on its own merits as a basis for progress in the negotiations. The European neighbourhood policy is an important tool to ensure good and lasting relations for the EU's neighbouring countries in the new more merit-based approach. Also towards the strategic partners, the Danish Presidency will seek to support a more joint European approach, based on common values and increased trade relations.

I have tried to transmit the message that the Danish EU Presidency will do whatever it can to advance all the issues on the European agenda and to implement decisions and policies to the benefit of all citizens and member states in a way that is professional and serious by acting as an honest and trustworthy broker.

Chairman

I thank the ambassador.

Deputy Timmy Dooley

I welcome Ambassador Pultz and wish him and his country well in the task ahead. We look forward to working with them through this committee over the course of the Danish Presidency.

The ambassador has identified the main issues on everybody's mind, such as jobs, growth and the economic crisis that currently exists. Does the Presidency intend to promote any specific ideas in terms of advancing job creation? The ambassador has identified a greener Europe as providing some potential in this regard. Given the expected growth of the European population in the long term, agriculture also possesses great potential. Ireland has experienced a turnaround in that sector. For this reason and when developing policies on food safety and food supply protection, Europe must be mindful of agriculture's position as an economic and employment growth enabler.

What is the Danish Presidency's opinion on the change in emphasis on the community model as a method of governing Europe? Since the emergence of the economic crisis, there has been a significant shift in power towards the two largest member states. I share many people's opinion that this is having a profound effect on small states in the first instance and on their citizens' acceptance of the European model. If the shift is allowed to continue, the long-term impact on Europe's growth as a community will be negative, given that small member states used to have equal access through the Commission process. How does the Danish Presidency intend to wrestle back the power that has been grabbed?

Deputy Pádraig Mac Lochlainn

Denmark takes over the Presidency during one of the greatest periods of instability in the EU's history. In the round, the project has historically been a force for good. However, the austerity policies being implemented across the continent are not working. One cannot discuss economic growth and job creation in the same sentence as austerity. I will turn to my questions as soon as possible, but I recall how President Barack Obama in an address to the American people outlined in clear terms the role of government in a recession. Where the private sector has contracted, it is the role of government and the public sector to stimulate the economy and to intervene. One could call it Keynesian economics. We must restore confidence. Given that what we have seen of the treaty so far has been alarming, it will reinforce the difficulty with the approach being taken across Europe.

In the Danish Government's Presidency, it must examine from where the target 0.5% of GDP came. It has been suggested that the national debt threshold of 60% of GDP should be reduced by 5% annually for those countries that have moved beyond it. In Ireland's case, this would constitute a reduction of €8 billion per year. It will not happen. No economist on the left or the right has stated that this is a sensible approach. I agree with the need for governmental prudence and the admirable objective of balancing budgets. Every household must balance its budget. In Ireland's case, however, there has been a profound injustice. The European Central Bank, ECB, is forcing the Government to pay unsecured bondholders to meet in its entirety the cost of the recklessness shown by people in high places who, without proper research or due diligence, invested in private banking institutions in Ireland and elsewhere. I have yet to hear an economist outline how this is correct, fair or acceptable.

We must start changing the language. Ireland has not been bailed out. Rather, our people have been loaned money to bail out financial institutions in Germany, France, Britain, the US and elsewhere that are bankrupt because they engaged in the trading of derivatives and mad, unregulated practices.

There are three aspects to this crisis. Interestingly, the Danish Government is implementing a burning the bondholders approach. It is outside the ECB's direction. In an article in today's edition of The Irish Times, Mr. Arthur Beesley has carried out an interesting analysis of the Danish approach vis-à-vis that of those countries that are stuck in the eurozone and must live with the ECB’s diktats. The Danish approach has more to do with sensible economics.

Given the Danish Government's freedom in this respect, perhaps its Presidency could examine the three aspects to which I referred, namely, banking, sovereign debt and investment. In terms of banking, there must be a comprehensive stress testing of every bank that avails of support, be it recapitalisation or something else. The banks must be cleaned out and everything must be put on the table. We do not need the partial assessments that have been done to date. Subsequently, a decision must be made on which banks to recapitalise.

In terms of sovereign debt, the private sector must share the burden. Greece is arguing about how to achieve this, for example, through the voluntary acceptance of a 50% write-down. I would like Ireland to be in the middle of that debate.

Regarding investment, the European Investment Bank, EIB, is just sitting there.

We have a good track record and the capacity to engage in a partnership of member states to get the European economy moving again. We are facing into a lost decade. If the Danish Government presides over the delivery of a fiscal compact that enshrines austerity in legislation across Europe, it will commence that lost decade. This will be the Danish Government's legacy. Given its experience and its freedom from the ECB's diktats, I appeal to it to give everyone a bit of a hand.

Deputy Bernard J. Durkan

I welcome the ambassador, congratulate him and his colleagues on their work to date and wish them all the best in the task ahead.

Mr. Barroso rightly identified this as a crucial time for Europe. Indeed, it could be said that every instance during the past ten years has been crucial. In terms of the adherence to a vision for Europe that was created many years ago, people on all sides have failed to recognise that working towards a vision needs commitment. That commitment has vanished along the way, as Deputy Dooley mentioned.

Discussing the task while forgetting how to achieve progress is easy. Everyone knows what the task is, but people have different ideas on how to go about it. Bill Clinton famously and correctly identified the importance of the economy. Confidence derives from it and investment and jobs follow, not the other way around.

My colleague, Deputy Mac Lochlainn, referred to economists. If the ambassador is an economist, I will apologise in advance. I mean no disrespect, but I must say something. Anyone who has watched, listened to and learned from economists during the past five years in particular knows that they were all wrong. They have not been right about anything. They subsequently told us that what happened was wrong, but everyone knew that already.

The current position is different and this is a crucial time in Europe's history. If we do not pursue and achieve the vision, we may be left with a nightmare outcome. It is an issue on which everybody must focus.

Both larger and smaller countries have a meaningful role to play. Their respective contributions are equally important and there should be no exclusion of one at the expense of the other. As Deputy Dooley observed, it should not be the case that one or two countries in the Union have the major role to play. Nor should they assume that role. While they have a contribution to make, it must be made in unison with their colleagues. Departure from that principle is a departure from the ideals set out by the founding fathers of modern Europe. Such a departure will have serious consequences; let there be no doubt about that. There may be a growing belief in some quarters that different challenges must be met in different ways. However, those ways have been tried in the past - they did not work then and will not work now. Just as Martin Luther King had a dream, we in Europe must have a dream and a common objective. Once that dream fades, we will fade with it.

Denmark is in a unique position at this time to have a major influence on what Europe is thinking and how it reacts. I do not agree with the notion that Ireland is being sadly and badly treated by everybody else. The bottom line is that much of what has happened to us economically was our own fault. We should not have done some of the things we did. I am not apportioning political blame in saying this; it is merely a fact of life. Moreover, some of our colleagues in other European countries have made the same mistakes, although perhaps for different reasons. How could anybody have believed that we Europeans, collectively or individually, could afford to live beyond our means, spend more than we earned and borrow more than was specified in the norms laid down many years ago in fiscal and banking terms? There is no sense in saying at this stage that we must abolish austerity. There is no way to abolish austerity except to work hard to overcome our difficulties and to do so in a cohesive and collective manner. If we do that, we will achieve something of what needs to be done at this particular time.

I compliment those countries which have remained true to the European ideal. The members of national parliaments of all countries in Europe, both within the eurozone and without, must recognise that we will either survive together or we will fall together. That is crucial at this stage. I hope that there is eventually a recognition that we can progress together, and a consequent sharing of responsibilities and of leadership. Every country, no matter now small, has a leadership role to play. Those of us who are members of island communities in Europe have difficulties which others do not. These include difficulties in terms of transport and access. Assuming that there is a panacea to all of the issues from a global vantage point is unrealistic.

I support proposals for a co-ordinated asylum procedure across Europe. We must address the issue of asylum seekers in a meaningful, careful and compassionate way. We in this country frequently complain and moan about the situation of the undocumented Irish in the United States. However, we have many undocumented immigrants in the European Union whose treatment has been less than exemplary and whose futures are extremely uncertain. Some of them have been living in Europe for 20 years but still have no status. That is not how it should be done.

Senator Fidelma Healy Eames

I welcome the ambassador and wish him and his colleagues well at the outset of the Danish Presidency. We are watching carefully in the knowledge that it will be our turn this time next year. Denmark is in an interesting position given that it is not a member of the eurozone. I understand it plans to be party to the new intergovernmental treaty, but perhaps the ambassador will clarify that for me. How does the Danish Presidency plan to interact with the negotiations and the process of implementing the treaty? In moving towards a more fiscally responsible Europe, which is the aim of the treaty, what is Denmark's position on the deficit rule, the so-called golden rule? Is Denmark likely to have this rule written into its own constitution? These will be major issues for Ireland. I see Denmark as different from us for obvious reasons, particularly in terms of its currency. I am keen to hear the ambassador's views on this issue in the context of his country's status as simultaneously outside the eurozone and also a full and active member of the EU.

My second question relates to the issue raised by Deputy Durkan on migration and immigration. The Danish Presidency has indicated its intention to continue work on a targeted and multi-pronged approach to preventing and combating illegal migration and to enhance the efficiency of the Schengen Agreement. Why is Denmark tightening its border controls and who is it targeting? Is that not contradictory to the principle of free movement of people within the EU and the efforts to enhance Schengen? In other words, is it open to the charge that its practice is contrary to its stated principles?

H.E. Mr. Niels Pultz

I thank members for their comments and questions. I shall do my best to respond to them. First, I was trained as an economist many years ago. There is a famous story about when President Truman was drawing up the Marshall Plan to assist Europe in the late 1940s. One day he summoned the most eminent economist in the United States to the White House in order to decide how to implement these rules in the best possible way. After a full day of listening to arguments "on the one hand" and "on the other hand", he turned to his chief of staff and requested that next time he bring a one-armed economist. Likewise, we have seen in the current debate that there is no single view among economists as to the best course of action to get us out of this crisis.

Denmark is outside the eurozone, as Senator Healy Eames observed, but our monetary and economic policy closely follows that of the euro in terms of the timing and size of the interest rate changes made by the Danish Central Bank. Given that some 75% of our exports are to European Union member states, how Europe deals with the problems of the eurozone is vital to our economy. Therefore, our Government has stated its support for the new international agreement in order to consolidate co-operation and ensure all member states adhere much more strictly to the measures agreed upon at European level. The current crisis is to some extent a consequence of the failure to make the right decisions, but it is even more so the case that we have failed to adhere to those decisions sufficiently strongly. We support the new treaty as offering a strong element of confidence to the markets that we will put our house in order.

At the same time we want to create employment opportunities. There we see not least the Internal Market, which has so far, if I understand correctly, provided approximately 2.5 million jobs in Europe over the past 20 years. We still believe there are some opportunities in Europe both in the more traditional way as well as in the digital area. Those are the two main areas where we see that confidence, economic growth and job creation can be enhanced over the next six months and we will do whatever we can to do so without going into discussions between Keynesian and non-Keynesian economists.

Regarding putting the golden rule into the Danish constitution, it has been argued - and it is a fact - that changing the Danish constitution is an almost superhuman task. It will take a majority in the current parliament, new elections, a majority in the subsequent parliament after elections and then a 50% majority in a referendum with a turnout of at least 40%. It is a very cumbersome procedure. Our constitution has not been changed since 1953. In the negotiations the Danish Government has argued that we need another way of ensuring that we adhere to the agreements that we enter. Our record within the European Union is sufficiently strong that whenever we take responsibility upon ourselves, we live up to it. There must be another way of doing it because we cannot put it into our constitution.

We strongly believe in the Community model method and believe it is the basis for the European Union, and the Commission has its proper role regarding the treaty. Therefore, we strongly support the role of the Commission and the other European institutions. We believe this is the best way to proceed in the legislative process that we have ahead of us.

I believe there was a reference to the Schengen Agreement and some strengthening of Danish border control. The Danish Government which came into office in October abolished whatever plans there were to strengthen anything - not border control, but controlling in a more visible way cross-border criminal activities. Whatever was in the planning has been abolished.

Senator Fidelma Healy Eames

Whom is Denmark targeting?

H.E. Mr. Niels Pultz

There are some cross-border criminal activities, not only in Denmark but also in other countries. Across Europe we try to co-operate to combat that kind of criminal activity.

Senator Fidelma Healy Eames

Does this relate to EU citizens or outside the EU?

H.E. Mr. Niels Pultz

It could be both; I am not sure. It is on both sides and of both types. There are various ways of dealing with those and, if I may put it this way, we no longer have an issue with-----

Senator Fidelma Healy Eames

How is Denmark dealing with that?

H.E. Mr. Niels Pultz

Within Europol, there is considerable cross-border co-operation on that effect. Sometimes co-operation between various police forces in Europe can really produce tangible results, which is what we believe in.

Senator Fidelma Healy Eames

What mechanisms-----

Vice Chairman

I am happy to come back to them, but the Senator's colleagues made many other points. I want to allow the ambassador to finish his response.

Senator Fidelma Healy Eames

Fair enough.

H.E. Mr. Niels Pultz

Did I answer Deputy Mac Lochlainn's questions?

Deputy Pádraig Mac Lochlainn

I was hoping that Denmark could lead Europe into the Promised Land and that it could present a new Marshall Plan for Europe.

H.E. Mr. Niels Pultz

We will do so when we have finally worn out the economists. Deputy Mac Lochlainn referred to the article in today's edition of The Irish Times on how we have been dealing with some banks. The banking structure has caused some interest in various quarters in Ireland and other countries. Our banking structure is totally different from that of Ireland. Those banks which had big problems have been very small banks. We had approximately 120 banks, two of them very big, four or five medium-sized and approximately 110 very small banks. Ten of them have had troubles and have disappeared and been partly taken over by other banks in a Danish Government scheme which has been approved by the European Commission. For the people who have lost money it has been a terrible loss, but for the economy it has been easier to handle than perhaps it has been for some of the banks here.

Vice Chairman

I have two questions. The ambassador referred to people losing money. Is he talking about Danish depositors losing money in Danish banks? Regarding the Danish Presidency, I understand that a declaration of intent was signed regarding greater co-operation between trio parliaments across the Presidency. I ask the ambassador to give an update on how that is developing. Do any other members have questions?

Senator Kathryn Reilly

I have a question on the dynamic the ambassador mentioned. He mentioned the roaming III regulation. As the ambassador will obviously be aware, we have a border on this island. I live in Cavan and when I cross the Border, the roaming charges skyrocket. Because business is mobile now, such costs are a big issue. The ambassador said he would seek concrete results in negotiations on the roaming III regulation. What progress does he foresee during Denmark's Presidency in those negotiations? How far does the Presidency hope to take that issue in that time? Bedding that down is important for growth, jobs and competitiveness.

The ambassador mentioned he was hoping to open new trade opportunities for European companies. Deputy Durkan mentioned that we need to set goals and targets and that the time for intent is over. How does the Danish Presidency hope to open those new trade opportunities and in what areas will they come? Will these bilateral agreements with third countries be universally beneficial for all member states or could they come at a disadvantage for one or two states?

H.E. Mr. Niels Pultz

Danish citizens' losses in banks have been as depositors and shareholders.

Vice Chairman

Is the ambassador saying it has been depositors?

H.E. Mr. Niels Pultz

Yes. Those who had more than €100,000 on deposit made a loss. I know of some banks where depositors lost money above the EU-wide €100,000 guarantee.

Regarding co-operation between the trio parliaments, I believe there was co-operation between the three Speakers of the trio parliaments 18 months ago, which has been the background for co-operation at committee level within the three parliaments.

During the Danish Presidency, the Danish Parliament and specifically various committees like the European Union affairs committee, the foreign policy committee, the finance committee, the fiscal affairs committee and so on will host approximately eight meetings between and among member states' parliaments in Copenhagen. I know this will take place and if there is more interest in this regard, I am pretty sure that more information may be found on the website of the Danish Parliament.

As for the proposed roaming III regulation, I can only say we will work as hard as possible to implement all the directives that actually give the prospect of enhancing growth and innovation and it could have a new opportunity during our Presidency. While I do not know the extent to which we will succeed, I can tell members it will not be through lack of effort and dedication on the part of the Presidency if we do not fulfil these targets.

On trade agreements, when I was trained as an economist I was told and I believe that global trade agreements are better than regional or bilateral ones. However, given the Doha Round of the WTO agreement has not been as successful as we had hoped, perhaps the second-best solution is to enter a bilateral or regional agreement and this is what we hope for. Generally, the benefits of trade agreements are greater than the disadvantages but of course there are sectoral groups that can experience greater competition from other areas and perhaps they sometimes are more vocal than are those who benefit. However, in general terms, there are benefits to entering that kind of trade agreement although a global one would be preferable.

Vice Chairman

On behalf of the joint committee, I thank the ambassador for his attendance of and participation in this meeting and wish both him and Denmark the very best of success in its Presidency at such a crucial time.

The joint committee went into private session at 12.30 p.m. and adjourned at 1 p.m. until 11.30 a.m. on Thursday, 19 January 2012.