I am pleased to have an opportunity to brief the Joint Committee on European Union Affairs ahead of this month’s meeting of the General Affairs Council (GAC) which will take place in Brussels on Tuesday, 20 November.
The GAC will meet for a morning session next Tuesday. I will represent Ireland. I will be joined by Minister of State Creighton. Agenda items for the meeting include:
An informal working dinner for GAC Ministers will be held on 19 November. President Van Rompuy will attend the working dinner where discussion will focus on the Multiannual Financial Framework (MFF) and preparation for the European Council on 22/23 November.
As I look ahead to next week’s Council meeting, it might be helpful also to update the Committee on the last General Affairs Council discussions which took place in Luxembourg on 16 October.
Cohesion Policy Legislative Package
The Cyprus Presidency has substantially progressed work on the cohesion legislative package.
The GAC has by now agreed a partial general approach on seven thematic blocks of the cohesion legislative package including on elements of the European Territorial Cooperation Regulation and Country Specific Recommendations.
The EU’s Cohesion Policy remains a clear demonstration of the solidarity between Member States, enabling change and encouraging development in the regions. It is perhaps worth reflecting here that our own experience of Cohesion policy has been overwhelmingly positive.
The General Affairs Council next week will discuss some further elements of the Cohesion Policy legislative package: details of these elements will be confirmed by Presidency shortly in advance of the GAC meeting. This legislative package aims to reinforce the strategic dimension of Cohesion policy and to ensure that EU investment is targeted on Europe's long-term goals for growth and jobs.
These partial general approaches do not prejudge the outcome of negotiations on other elements of Cohesion policy or on the Multiannual Financial Framework.
Presentation by the Commission on their Work Programme for 2013
Next week’s Council meeting will also include a briefing by the Commission on its work programme for 2013, which it adopted on 23 October. Each year the European Commission publishes an annual work programme outlining how the European Commission President's Political Guidelines for 2009-2014 will be implemented in the coming year.
The Commission work programme 2013 contains a comprehensive outline of the Commission’s priorities for 2013. The programme is divided into seven key areas of work:
· Towards a genuine Economic and Monetary Union;
· Boosting competitiveness through the Single Market and industrial policy;
· Connect to Compete: Building tomorrow’s networks today;
· Growth for Jobs: Inclusion and excellence;
· Using Europe’s resources to compete better;
· Building a safe and secure Europe; and
· Pulling our weight: Europe as a global leader.
In its work programme, the Commission puts particular priority on the implementation of existing legislation as well as on measures that contribute to tackling the current economic crisis. The focus is on strengthening effective economic governance and on increasing Europe’s competitiveness – including by making better use of the untapped potential of the Single Market.
This focus ties in well with Irish Presidency priorities, and as such, serves Irish national interests favourably. The work programme contains proposals that will directly contribute to fulfilling the political goals agreed upon in the Compact for Growth and Jobs.
I am also pleased to note that the work programme anticipates progress on a range of trade agreements with third countries, including in relation to the US and Japan, both of which are of particular interest to Ireland.
Follow up to the European Council of 18-19 October
During the October meeting of the GAC in Luxembourg, President Van Rompuy joined Ministers via video-link for a lunch time discussion of preparations for the October European Council.
At last month’s European Council meeting in Brussels, leaders had a number of substantive issues on their agenda, including reflection on the possible future shape of Economic and Monetary Union, which underpins our shared currency; as well as taking stock of implementation of the Compact for Growth and Jobs.
Beyond those economic issues, Heads of State or Government (HoSGs) also had a good exchange on our relationship with the Union’s strategic partners, most notably with China; and they adopted a comprehensive set of conclusions on the developing situations in Syria, Iran and in Mali.
The central focus of deliberations among leaders was on the means of strengthening Economic and Monetary Union and most particularly on progressing towards so-called ‘banking union’. The framework for these discussions was provided by President Van Rompuy’s interim report, “Towards a Genuine Economic and Monetary Union” (EMU) which he presented. It was agreed that President Van Rompuy will continue his consultations with Member States and others before bringing forward his final report to the December European Council, which will set out a specific and time-bound roadmap for strengthening EMU.
Importantly, leaders reaffirmed their commitment from June to break the vicious circle between banking and sovereign debt. Heads of State or Government also clearly reaffirmed the commitment to provide for the possibility of recapitalisation of euro area banks by the European Stability Mechanism (ESM).
With regard to the Single Supervisory Mechanism – which is a critical step in the creation of a banking union – leaders have now agreed a clear timeframe for its entry into operation as a matter of priority, with its legislative framework concluded by the end of this year. While work on the operational implementation of the single supervisor is to happen during the course of 2013. This concrete timeframe is most welcome.
The European Council tasked the Eurogroup (of Finance Ministers, including Minister Noonan for Ireland) to draw up the exact operational criteria that will guide direct bank recapitalisation by the ESM, “in full respect of” the June decisions. This too is a positive outcome.
Leaders also adopted conclusions on the implementation of various aspects of the Compact for Growth and Jobs. While progress has been made in beginning to implement the various elements of the Compact, what is evident is that more needs to be done. Implementation here is key.
Taking forward the various aspects of the Compact at EU level – whether concerning for example, the Single Market, youth unemployment or expanding opportunities for external trade – will form an important aspect of the our work as Presidency next year.
Preparation of the special European Council of 22-23 November 2012 – MFF
The European Council meeting on 22-23 November is expected to be focused almost exclusively upon the Multi-Annual Financial Framework for the period 2014-2020. President Van Rompuy is aiming to conclude negotiations of the EU Budget Multiannual Financial Framework at this meeting.
The Multiannual Financial Framework, the MFF, will be discussed informally at a dinner with President van Rompuy, ahead of the GAC on the night of 19 November, and then again during the meeting of the General Affairs Council itself.
The Cyprus Presidency has been leading on negotiations up to now. It recently put forward a new version of the MFF negotiating box, which for the first time contained proposed figures for different elements of the MFF. Among other things, the Cyprus Presidency proposed significant cuts to agricultural and cohesion spending. However, its compromise proposals have not gained the support of Member States. In some cases because the amounts proposed were felt to be too large, in other cases – including ourselves – because it was felt the amounts were too small.
Negotiations will from now on be led by President Van Rompuy and his team as we approach the meeting of the European Council after next week’s GAC. President Van Rompuy will shortly table a draft compromise proposal which will form the basis of discussion at the General Affairs Council. It is expected that this proposal would propose significant cuts to the original Commission proposal, and in all probability cuts greater than those proposed by the Cyprus Presidency. While this would be welcomed by some Member States, it will be opposed by others, including ourselves. In addition to the proposed global amount of cuts, there would also be a question of how those cuts would be distributed among the different headings of the MFF.
There is no doubt that reaching agreement on the MFF this month will be a difficult task: Member States’ positions are far apart. Some have quite hard-line positions, especially those who want the overall size of the Budget reduced. Some have called for very significant cuts to the CAP. Some want increased spending on Cohesion. The gaps will be hard to bridge, but I am convinced that with the right political will we can get there.
How will we approach the European Council meeting next week? As the Members of the Joint Committee are aware, Ireland wants a properly funded and properly functioning EU, with the right mix of priorities, fair allocation of resources and a focus on jobs and growth. The EU must have a budget that is fit for purpose. We are committed to supporting a vigorous, consumer-focused agricultural production base in Europe, with a commensurate CAP budget. The EU budget must also support the Europe 2020 Strategy for Jobs and Growth while at the same time reflecting current budgetary consolidation imperatives in Member States. We will seek to ensure that adequate funding is available for investment in economic growth and the creation of employment; and that countries in our situation, especially in relation to unemployment, can access all EU growth enhancing programmes.
These are our aims. We must be realistic: a deal will require compromise by all Member States, including ourselves. But we will try hard to get the best deal possible.
Preparation of the European Council of 13-14 December 2012
Next week’s Council meeting will also take the first step in preparing for European Council scheduled for 13-14 December by considering the annotated draft agenda for the meeting. The annotated draft agenda was circulated last evening and sets out the key matters for consideration by leaders.
The December Summit is expected to centre around deliberation on President Van Rompuy’s final report on strengthening economic and monetary union. This report, prepared in close collaboration with the Presidents of the Commission, the Eurogroup and the ECB, should set out the “specific and time-bound roadmap” for moving ahead on the essential building blocks for a genuine EMU.
We will continue to engage with President Van Rompuy’s team as they continue work on the final report. I look forward to reading President Van Rompuy’s final report. It will, I am sure, seek to ensure a strong and stable currency, something which is clearly in our own national interest as well in the interests of the euro area and indeed the European Union as a whole.
The December European Council will also assess progress made concerning the Single Supervisory Mechanism for euro area banks as well as on other banking-related legislative proposals and will provide further orientations should they prove necessary. Leaders will also take stock on progress being made under the Compact for Growth and Jobs and under the various Single Market initiatives. This close and on-going follow-up at the level of Heads of State or Government on these critical issues for the Union is something which I warmly welcome and encourage.
The European Council will further provide guidance concerning the issue of EU Enlargement. This consideration will be undertaken on the basis of the Commission’s autumn assessment. Foreign policy issues will also be addressed by leaders, as necessary and where they can add value.
I appreciate the attention of the Joint Committee and I look forward to hearing you comments. Within the time available to us, I will, of course, be very happy to respond to your points or queries.