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European Council

Volume 590: debated on Monday 5 January 2015

I attended the European Council meeting in Brussels on 18 December. This was the first Council chaired by its new President, the former Polish Prime Minister Donald Tusk.

Discussion focused on the new European Commission’s investment plan and structural reform agenda, and on the situation in Ukraine and relations with Russia.

Investment and Structural Reform

At a time of low growth in Europe, encouraging investment and structural reform are urgent challenges. I therefore welcomed the new European Commission’s focus on investment and reform, but warned that there are still many important details to work out.

Highlighting the UK’s expertise in managing the National Infrastructure Plan, I emphasised the importance of proper governance arrangements for the new European Strategic Fund for Investment. In this case, that means ensuring the European Investment Bank can deliver without political interference and resisting the introduction of new rules and procedures. This position was supported by other member states, including Germany, and reflected in the Council Conclusions.

While the establishment of this new Investment Fund is a positive step, it will not be able to deliver the long-term boost to growth that Europe really needs if it is not supported by urgent structural reforms and the appropriate monetary policy.

The UK has identified four priorities for European action on this, which I highlighted in the discussion: increased ambition on deregulation; faster progress on services liberalisation; completion of the digital single market, and the conclusion of the Transatlantic Trade and Investment Partnership (TTIP) deal.

I secured an ambitious commitment in the Council Conclusions to better regulation, in line with the conclusions of the last Competitiveness Council. These make important progress towards several key UK objectives, including targets for burden reduction and greater independent scrutiny of Impact Assessments. This proves that our agenda has gained traction in Brussels, with the new Commission announcing important reforms to enhance the external expertise in its Impact Assessment Board.

To underline the broad political support that exists for TTIP, I convened a meeting in Brussels immediately ahead of the Council in partnership with the Confederation of British Industry (CBI). Together with the Prime Ministers from Italy, Spain, Poland, Denmark, Finland and Latvia, along with European and US businesses and leaders of two of the largest political groups in the European Parliament, we discussed the importance of concluding an ambitious and comprehensive TTIP agreement.

TTIP has the potential to inject an extra £100 billion into the European economy every year. As the CBI’s report published on the day of the Council highlights, it would bring significant benefits both to consumers and to businesses, especially SMEs, with the potential to create thousands of new jobs on both sides of the Atlantic. At the Council, I succeeded in ensuring that the conclusions, which set a target completion date of 2015, reflected the need for the deal to be “ambitious” and “comprehensive”.

Leaders also agreed on the need to take action to stop companies avoiding taxes. The UK has been championing this cause since our G8 presidency in 2013. I look forward to Commission proposals in the New Year that will increase transparency around member states’ tax deals with companies.

Ukraine and Russia

The Council also had an important discussion on the situation in Ukraine and relations with Russia. I was clear that the EU needed to get behind the new Government of Ukraine and to help them develop a clear road map to deliver the challenging reforms required to make Ukraine a success. There was wide agreement on this point and the Council’s conclusions confirmed the EU’s continued support for Ukraine.

I also underlined that we cannot forget Russia’s illegal and destabilising actions in Ukraine. On the eve of the Council, member states agreed to deepen the EU’s ban on trade and investment in Crimea. This sends an important signal that we will not forget about Russia’s illegal annexation of Crimea.

With Chancellor Merkel, I was clear that the EU needed to maintain sanctions until we see evidence that Russia is implementing the Minsk memorandum in full, and working for a comprehensive de-escalation of the conflict in Eastern Ukraine.

While in Brussels, I also held meetings with Prime Minister Kopacz of Poland and Prime Minister Borisov of Bulgaria. The main issue discussed in both meetings was the situation in Ukraine and relations with Russia.

A copy of the Council conclusions has been placed in the Libraries of both Houses and can also be found at: