EU presidency a chance for Ireland to show a sense of purpose

EUROPEAN DIARY:THE GOVERNMENT is stepping up preparations for Ireland's presidency of the European Union in the first half of next year. Numerous challenges are in store, no matter what happens in the European arena before then.

The rotating presidency is a lesser thing since Herman Van Rompuy took charge of EU summits in 2010 and Cathy Ashton became foreign policy chief. Nevertheless, it will still fall to the Government to advance a large and complex body of new legislation in ministerial councils and in talks with the European Parliament.

After the humiliations of the bailout, this presents an opportunity in the ongoing campaign to recast Ireland’s battered image. It seems to be de rigueur these days for top Europeans to utter dutiful words of praise about the Government’s execution of painful budget cuts, but it will take a long time yet to shake off the damage done to the State’s reputation.

When Ireland last held the presidency, in 2004, the atmosphere was markedly different. That was the time when Bertie Ahern, then at the height of his powers, secured a deal on an (ultimately doomed) European constitutional treaty.

It was under Irish presidency too that the EU completed its biggest enlargement, with the accession of Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia.

If these were occasions for fanfare and celebration, the looming presidency will be a more modest affair – the emergency situation in the euro zone and in Ireland itself demands that. With 14 weeks to go, the diplomatic and official apparatus is already in countdown mode.

Taoiseach Enda Kenny and most of his Cabinet will travel to Brussels on Wednesday week for a meeting with the college of European commissioners. At the same time, European Parliament president Martin Schulz will be in Dublin for talks with Irish officials.

These engagements reflect the necessity for coherence in the political agenda. When it comes to legislation, the Government’s job will be to align member states and advance their position in talks with the commission and MEPs. This is how Europe’s laborious process of “co-decision” works.

The task ahead is dominated by the debt debacle. In practical terms, this means the Government will be preoccupied with contentious banking legislation and the debate on yet more economic governance reforms. This is increasingly likely to culminate in another treaty change negotiation.

Many leaders would recoil in horror at the prospect but that’s not how German chancellor Angela Merkel sees it. Where she leads, others must follow.

Van Rompuy is to table a paper on the reform of the economic and monetary union to EU leaders in December. With commission chief José Manuel Barroso already calling for the creation of a new federation, this is divisive ground. Ahead of the German election next September, in question now is how far and how quickly the reform agenda advances under the Irish presidency.

Although the banking portfolio is vast, the prime issue is the adoption of new laws to give the European Central Bank the power to supervise euro zone banks.

Striking an agreement on the new regime – which is a precondition for the direct recapitalisation of stricken banks by the ESM fund – is already proving difficult.

While many countries want the deal done by the end of the year, German backsliding and jitters in non-euro countries like Sweden and Poland suggest this one will drop into the Government’s hands.

Bringing member states together is only half the battle, however. MEPs have no upfront role in legislation on the ECB but they will get one here. Why? Because the mandate of the European Banking Authority, in which the parliament has a say, must be changed in order to give the ECB new powers.

Further politicking surrounds proposals for new directives on deposit guarantees and the orderly resolution of failing banks.

Then there is the question of the next EU budget, which is due to run from 2014 until 2020. Van Rompuy has scheduled a special summit in November in a bid for an early deal on the overall budget.

If this is achieved, it will fall to the Irish presidency to seek agreement on the allocation of money within funding streams like agriculture and research.

If agreement on the overall figure is not reached beforehand, Ireland would take charge of the negotiations in January before it goes back to heads of state and government.

All of this presents a clear test. As the Government twists and turns over the December budget, the workload is soon to expand radically.

For all the financial woes still confronting the State, there is a chance here for Kenny et al to demonstrate competence, ambition and a sense of purpose to the outside world.