Minister, distinguished guests, ladies and gentlemen:
Dia dhaoibh! Good morning!
It’s always a pleasure to come back to beautiful Ireland and to the lively, cosmopolitan city of Dublin. But so much has changed here in recent months! The global economic crisis has hit this country very hard, and the first thing I want to say to you is that Europe stands with you in facing this crisis and in building the recovery. We will weather this storm together.
That's what the European Union is all about: solidarity. Deciding and acting as one, for our common good.
I hope I don't have to persuade this audience that EU membership has been very good for Ireland. If we put it into figures, Ireland has received some €62 billion in EU funds since it joined in 1973. But I think you'll agree the relationship has been about much more than funding. Ireland's double digit growth was an example of how EU membership could provide a kick start to development if it was used effectively. It has been the model for countries joining the EU, including my own. Today, Ireland hosts 7 of the world's top ten ICT companies and 9 of the world's top ten pharmaceutical companies. For all these companies, Ireland is the gateway to the EU, the world's largest market.
And the contribution has been entirely two-way since Ireland's contribution to the EU policymaking has always been significant and Irish Presidencies are among the best remembered in Brussels because they have always achieved results. Let us not forget that the EU needs Ireland as much as Ireland needs the EU.
Today, I want to argue that EU membership will continue to be Ireland's life-line, because it is action at EU level, and by the EU at global level, that will get Ireland and the rest of us out of our present dire straits.
I want to stress three basic facts:
1. The present crisis affects Europe as a whole, which is why we need coordinated EU action.
2. The EU is already implementing a recovery plan that will benefit Ireland along with the rest of Europe.
3. European recovery depends on global recovery, which requires concerted action by all major economies – and the EU has the collective strength to shape that global agenda.
Let me say a little more about each of those points.
1. The crisis affects the whole of the EU
Across the European Union, economic output has fallen by around 4% this year. Unemployment is up from 7% a year ago to around 9% this summer, and it will probably exceed 10% in 2010. That means half a million jobs lost every month! Worst affected will be young people.
However, it's an advantage to be part of the euro area. So far, the European countries worst hit, and which have had to be bailed out by the IMF, have been non-euro-zone countries such as Hungary, Iceland, Latvia and Romania. Indeed, the crisis has driven Iceland to seek refuge within the euro area as soon as possible by applying this summer to join the EU.
2. The EU is implementing a recovery plan
In March 2009, the European Council agreed to implement the Recovery Plan drawn up last year by the Commission. This plan is tackling the recession in three ways.
First, the EU is injecting more than 400 billion euros into the European economy to stimulate demand, create jobs and boost welfare protection.
The Commission has made available an extra 11 billion euros of structural funding in 2009.
45% of the EU Budget for 2010 will be devoted to growth and employment measures.
The European Investment Bank has made €30 billion of credit available to small businesses. This could help save hundreds of Irish firms from insolvency.
The European Central Bank has pumped massive amounts of money into the Irish banking system to help save it from collapse. By March 2009, ECB loans to Ireland totalled 120 billion euros. By comparison, this county's Gross National Income in 2007 was 160 billion euros.
Second, there is a consensus that we must do all possible to avoid a crisis of this kind in the future. That's why the Commission has put forward detailed proposals for a new pan-European system of financial supervision. The European Council supports these ideas and the Commission will be putting legislative proposals to the Parliament and the Council by the end of September. We aim to have the new arrangements up and running in 2010.
Third, the recovery plan is supporting employment by re-programming the European Social Fund and providing easier access to the European Globalization Adjustment Fund. This fund was set up to help redundant workers get back to work, through training and job placement schemes. Some of it will be used, for example, to help workers who are being laid off from the Dell computer plant in Raheen, County Limerick, and from other local companies that have experienced knock-on redundancies.
The Recovery Plan will thus help both employers and employees, businesses and society. It will help young people, by providing better education, more skills training and more job opportunities.
3. Recovery must be global, with the EU helping set the global agenda
The recession is a global challenge and it calls for global action, coordinated via the G20 and implemented via the IMF and World Bank. The EU enables 27 European countries – including Ireland – to speak with a single voice in these global economic forums.
Recent data for trade, industry and business around the world are all encouraging. Asia appears to be leading the way to recovery, and America's economic contraction has levelled out. In Japan, for the first time in twelve months, real GDP was positive in the second quarter of 2009.
In the European Union, the slump in retail sales is slowing: it roughly halved between the first and the second quarter of 2009. At the same time, inflation has been falling sharply, which is good for people's purchasing power.
2009 will continue to be tough for the EU economy. The crisis will take time to fix. But we are fixing it. This summer, France and Germany came out of recession – by a whisker – and some indicators such as consumer confidence and inter-bank lending are more positive. We expect a gradual recovery to begin in 2010 for Europe as a whole.
So, ladies and gentlemen, Ireland and the other EU countries are facing this crisis together. As an EU member, Ireland's voice is heard in the global discussions that set the agenda for world recovery. The EU is working to ensure that the recovery is sustainable thanks to a thorough reform of the banking and financial systems.
Of course, to some of you this may feel like cold comfort in the middle of the suffering that the crisis is causing, and in Ireland the contrast with the boom years is extreme. Not the best moment then to promote a new Treaty for the EU? Well, I'm not so sure. Perhaps you will allow me a few words on this, but before I say anything on the Treaty, I want to make it clear that I have not come to Ireland to lecture anyone. The decision on how you vote is just that: your decision.
I am here because I believe that it is for you to hold me accountable. I have come to answer questions about the Treaty. I believe that all European citizens have the right to know what the EU is proposing and doing, and that this is a central part of democracy.
And as part of this, I believe it's important that people are aware of the efforts of the EU to combat the crisis, and to ensure that it is as short as possible. And when I look at the countries outside the euro-zone going to the IMF for bailouts, I do think that common sense says that Ireland is better sheltered inside the eurozone!
But I also think there's another issue that's talked about less. This Treaty is the result of 8 years of painstaking and long negotiations between 15 and then 27 Member States. It's not perfect: compromises never are, but the reason we all were prepared to invest so much time and energy into it was precisely because it would equip us better to deal with challenges like the financial crisis, like the impact of globalisation, like climate change and migration. It was designed to enable the EU to play an effective role in these areas, while ensuring that at the same time, the democratic control over those decisions, is strengthened.
So today, in the midst of this economic crisis, it is time that we spent more of our energies on preparing the policies that we need and less on fixing the institutional engine room. The other 26 Member States have done everything possible to address the concerns expressed by Irish voters last year, and all will be watching for Ireland's decision on 2 October. My hope is that the referendum will finally put an end to our internal reform process so that we can concentrate on finding common solutions to our common problems, as we have done so successfully during the entire post-war era.