Speech by FF Leader Micheál Martin, pre European Council statements

Published on: 21 May 2013


Over the last five years the greatest failure of Europe’s leaders has been to fall back into complacency after every period of turmoil.  The agenda for tomorrow’s meeting of the Council may be recorded as the worst example of this so far.

Since the Council last met it has been confirmed that over 27 million Europeans are unemployed. Growth projections in key economies, the Eurozone; and the Union as a whole have been cut. Capital controls remain in place throughout member states to avoid them having to leave the common currency.

The Union’s budget, already inadequate for what is required, is delayed.  The essential elements of a strong banking union continue to be undermined and vital decisions have been fudged.

And yet the leaders of Europe will fly tomorrow to Brussels and spend nearly all their time talking about tax collection and energy.

I accept that both are serious issues and they are part of an overall economic package, but they are nowhere near the centre of the urgent and ambitious actions which are desperately needed.

This is not the agenda of leaders who understand the growing demands of citizens.  It shows a failure to understand that simply looking for ways to deepen the internal market ignores the core problems facing Europe.

Nothing to be discussed tomorrow will have any impact whatsoever on growth or jobs in the near and immediate future.  They may have an impact in the longer term, but no one here or in Brussels has been willing to estimate any immediate impact.

It is an agenda of leaders acting as if they have all the time in the world and no urgent business.

The Taoiseach has repeatedly told us about focusing laser-like on getting Europe through the crisis by delivering growth and jobs.

Yet this summit is indistinguishable from one which would have been produced without any national presidency.

There is nothing to be discussed which hasn’t been working its way through the system for some time, ready to appear when there’s space available.

It was the Tánaiste who only a few weeks ago was busy jumping on the anti-hegemony bandwagon – telling us that without any doubt the government’s policy is to push for a new economic policy at European level.

Well if this policy is nowhere to be seen when we hold the Presidency of the Council, when will it appear?

The agenda for this summit is exactly as it was intended when a work programme was announced by President Van Rumpouy a year ago.  When you step away from the repetitive briefings about major ‘breakthroughs’ what you see is the slow implementation of already agreed policy.

EU Budget

It is at best a pity that much of our Presidency is being devoted to trying to push the Parliament to sign off on a damaging budget agreement.  At a moment when Europe needs investment the Union’s budget will implement a cut in investment, with the proportionately largest cuts hitting essential areas such as rural supports and research.

The position of the Parliament in trying to lessen the damage done by the agreement, particularly in the immediate future, is one Ireland should be supporting.

Equally we should have used our position in the Presidency to propose a more fundamental review of the Budget.  This should have placed a new focus on ensuring that the Union can play more than a minor role in helping regions suffering the most in the recession.

Spending €144 per year to help each young unemployed person is not even a token attempt to directly alleviate deep problems.  The reality is that our presidency is deepening the existing reliance on a single-track policy of integrated markets as the only answer.

 

Banking Union

The lack of a banking union is agreed as being one of the major factors in the financial crisis not to forget its role in causing the wider economic crisis.  The political agreement last year to move forward with a banking union was an important part in stabilising the sovereign debt markets.

Just as the agreement has helped, the failure to implement it on time or comprehensively enough could yet cause considerable damage.

I have already spoken at length about the different elements which are required for a durable banking union that supports growth rather than threatens it.  As things stand each of the pillar elements of a uniform resolution, deposit insurance and oversight regime have been watered down significantly.

Last week Mr Schauble once again repeated his belief that a new treaty is required before these can be properly implemented.  If this approach wins out it could directly lead to a major escalation of the crisis the next time a bank is in difficulty or when the market loses confidence in the ability of national governments to address emerging financial pressures.

This is not some abstract issue.  Europe cannot return to jobs and growth until it has a stable financial system which has the ability and confidence to lend.  This cannot happen without the banking union.  We need it now.

The failure to seriously address the delays to implementing the banking union or its watering down represent a failure for this summit before it has even begun.

 

Energy

The holding of these pre-Council debates was presented as a major reform and an increase in parliamentary accountability.  The reality is that there is no accountability because all we get from the Taoiseach are statements about how everything is moving smoothly and great things are being decided.

In addition, there is no circulation of a national position on the main items to be discussed. All information we receive before these debates comes from Brussels.

For tomorrow’s meeting the annotated draft agenda is, as I have said, very limited.

Everyone agrees that having a market which delivers sustainable, secure and affordable energy is important for Europe.  The Lisbon Treaty extended the Union’s competence in this area and it is necessary to move it forward.

No information has been supplied about any specific matter to be discussed at the summit in relation to the energy sector.  Therefore we have to assume that this is just a formal review rather than a substantive agenda item.

The paperwork refers to reducing the cost of energy in the years after 2014 if the internal market reforms are implemented next year.  This confirms that it has nothing to do with the immediate task of delivering recovery through jobs and growth.

 

Tax Policy

The summit will move forward the recent Commission proposal on fighting tax fraud and improper evasion.  It requires significant detailed evaluation to ensure that this is exactly what it does.

On the face of it, most of the proposed measures seem reasonable.  They involve more systematic co-operation between tax authorities in the different member states and common standards in terms of transparency.

These are the sort measures which deserve widespread support and they should both be uncontroversial and involve little or no administrative burden on businesses.

The principle that the tax laws should be applied fairly, transparently and comprehensively is a good one and the bulk of the proposed actions will help us in the fight against the black economy.

What this must not be allowed to be confused with is the much wider and more significant debate about tax competition.  The obsessive pursuit of an agenda of tax harmonisation by some countries has completely distorted the economic agenda of the European Union, side-tracking it onto an issue which is completely marginal to the task of improving the short and long-term growth potential of the Union.

What they have been seeking is a scale of uniformity which is not even found in the world’s oldest currency union, the United States of America.  The various states have the ability to compete on taxes and subventions in a way that is impossible in Europe.

Delaware is home to the nominal headquarters of the majority of major US firms.  Other states are in a position to offer direct subsidies to companies to get them to move, and these can go as far as involving zero tax and welfare contributions.

At present Europe has middle-approach which allows tax competition but does not allow it to involve subsidies or to distort the ability of firms based in other countries to compete. 

No study has yet been produced anywhere which shows that enforcing tax harmonisation would deliver a single job to Europe – but what it would do would be to directly undermine the economies of some peripheral economies.

As long as the Commission limits its proposals to evasion and fraud then time can be freed up for more productive discussions on the issues which will actually have an impact on Europe’s future.

 

Syria

The rising humanitarian crisis surrounding the Syrian conflict should be raised during the final session of the summit.

The latest information is that aid agencies working with hundreds of thousands of Syrian refugees in Lebanon and Jordan are in need of urgent assistance.  Rising summer temperatures and poor conditions mean that they are facing serious health risks than can be controlled but only if action is immediate.

Ireland should support an urgent release of extra funding and, if required, personnel to prevent a further tragedy emerging.

I believe we should also support the efforts of US Secretary of State John Kerry to inject greater urgency into the proposed peace conference.  Unlike other such conferences, this one is not dealing with a conflict that has gone on for many years and it is one which is in great danger of escalating even further.

The reported decision of Russia to provide effectively open-ended military support to the regime could have a grave impact in reducing the willingness of the regime to embrace a negotiated settlement. 

Europe’s leaders should again reassert the fundamental principle that the Syrian people have the right to live in a democratic country free from repression.

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