Ensuring real and lasting recovery in Ireland and Europe
Keynote address by Tánaiste and Minister for Foreign Affairs and Trade, Eamon Gilmore, T.D. Ireland-France Chamber of Commerce
25 June 2014
(Remarks delivered 8am, Stephen's Green Hibernian Club, Dublin 2)
Ambassador, ladies and gentlemen,
During my St Patrick’s Day programme in Paris earlier this year I was talking to your Chamber Director, Cliona McGowan, and she asked me to speak at this breakfast.
It was an easy decision. I was delighted to say yes right away, and I’m delighted to be here this morning.
I am all the more happy to be here because today is exactly the sort of day we should discuss our theme of “ensuring real and lasting recovery”. This week, I will be in Brussels ahead of the European Council meeting which will seek to nominate Europe’s next leadership team. More importantly still, that European Council will set strategic policy priorities for that team – I’ll talk a little more about that shortly.
Here in Ireland, we’re in a period of change too. As you know, at the end of next week I will hand over the leadership of my party to my successor, and the government will go through some changes soon after that.
I cannot really speculate about those changes here at home. But what I can do is reflect on the last three years and talk about what I believe lies ahead. What challenges and opportunities face us – on this island, in France, in Europe and globally.
The businesses and organisations you all represent survive and grow due to an important mix of factors:
·Money, definitely.
·People, certainly.
·Innovation, and the continuous change that goes with it.
...and as well, something that is critical for all this to work – reputation.
Countries also need these four elements in place – this virtuous circle, if you like - to survive and succeed. In March 2011, Ireland pretty much had no money and since late 2010 was only getting it from one expensive source – the EU/IMF programme.
Our people, though working hard, were in despair
-as nearly 7,000 private sector jobs a month were being lost
-as salaries were falling if you had a job
-and as taxes started to rise.
Our previously-innovative economy had bet the house on....well....put it this way, we bet the house on houses....
Finally, our reputation was in tatters, with Irish companies’ creditworthiness questioned abroad because of it and foreign companies beginning to question their relationships with Ireland.
In 2011, Enda Kenny and I had our joint plan to stabilise the economy and grow it again, with job creation at the heart of that plan. Balancing the books – the money side – was obviously a vital and important element, but only one element. And so, a major reason why I chose to combine the role of Tánaiste with being Minister for Foreign Affairs and Trade was to meet that reputation challenge head-on.
We had to make people abroad – so crucial to this most open of economies - believe in Ireland again. As I said, we’d lost their trust by 2011 and to a good extent, deservedly so.
Not only that, in many ways we’d slowed our engagement with people abroad. And we’d started to forget that golden rule of communication – don’t just talk, listen too. This was certainly the case with our relations with the European Union.
We had to work very hard across Europe and across the globe, meeting decision-makers and influencers. Listening. Responding to their concerns and questions. Showing them how serious the Irish people were about a lasting recovery. Showing them why they should keep faith with Ireland - be they governments, business partners, opinion-forming media or whoever.
I was determined to lead a whole-of-government drive to improve Ireland’s reputation with audiences like these abroad, using our diplomatic network to the full in conjunction with state agencies, and also our well-placed Irish diaspora as organised through the Global Irish Network. France has the largest representation of all non-anglophone countries in that network, by the way.
One of those Global Network members, Clem Garvey, has just become President of your sister network in Paris, Network Irlande – I encourage you to support him in his work.
So, this work of informing, explaining, listening and persuading in the name of reputation was - and still is - vital. It’s work that never stops and should never be allowed stop again.
Why was all this so important in Ireland’s case?
· Because we wanted the EU/IMF programme to end on schedule, which it did without any need for precautionary facilities.
· Because we had to win the argument that Ireland’s debt sustainability needed to be secured, with major results already on our EU/IMF programme interest rate and term, as well as the resolution of the infamous promissory notes problem. The work goes on regarding our legacy bank debt, as you know.
· Because we needed perfectly sound Irish exporters - including yourselves - to maintain and grow their businesses abroad without doubts as to Ireland’s national creditworthiness.
· And because, through a stabilised economy and much-improved competitiveness, we needed to continue to attract investment of the kind represented by some companies in the room this morning.
These last three years were about stability, renewed growth and restoring confidence in Ireland. Doing what we said we’d do, and making sure people abroad understood that and helped us out – not just in Ireland’s interests but ultimately in their interests too.
Above all, Europe needed Ireland to get out of the danger zone and we have.
All of this work was about ensuring real and lasting recovery. On every measurement, Ireland is in a much better place than in 2011. As businesspeople, you know these numbers well so I don’t really have to list off bond yields, deficits, growth rates and so on. We are either on target or ahead of target.... pretty much across the board.
But I will list off a few statistics on jobs. They’re the statistics that matter.
Unemployment is now 11.7%, down from its 15.1% high just over two years ago. We have had 24 consecutive months of the unemployment rate falling.
Dig deeper into those figures and you find that there are 42,700 more people in work now than this time last year. Virtually no other country is creating new jobs at this pace and we had the strongest rate of employment growth in the EU in 2013.
A great improvement though all this is, 11.7% is still far too high and youth unemployment in particular remains too high - so there remains so much to do, including so that you in the business community are in a position to expand further and employ more people to help with that expansion.
But I hope you agree that this first phase of Irish recovery has been a positive one.
I want to talk now a little about France and start by thanking the French government – through Ambassador Thébault – for their support and their contribution to Ireland’s recovery. It’s a statement of the obvious that France is a key Eurozone and EU member state. Equally important, of course, is that France is our neighbour and our friend.
That said, frankly, back in mid-2011 Ireland’s damaged reputation and our lack of real EU engagement at political level meant there was some rebuilding work to do, including with France. I ensured that France was in our top priority list for renewed engagement. Within weeks of entering office that year, I visited Paris for a three-day programme of media, business and political engagements.
My programme included an excellent meeting with my then French counterpart, Alain Juppé. As well as discussing foreign policy issues, we worked together to defuse a rare and regrettable bilateral dispute over that ill-judged and over-simplistic attempt by Mr Sarkozy to link corporation tax with a wholly-justified cut to our EU-IMF programme interest rate. Michael Noonan visited at the same time and - over breakfast at our Embassy, I remember - we co-ordinated our approaches as he was meeting Christine Lagarde the next day.
This was an early example of the kind of considered, planned, joined-up and constructive engagement this government engages in. By that I mean defending your position robustly and consistently, for sure - but listening and explaining too.
To cut a long story short, Mr Sarkozy, with the benefit of more information and a sense of the bigger picture, soon gave up on that particular plan of his.
The corporation tax issue between us hasn’t gone away entirely but I might venture that the French approach at political level is now more level-headed, as indeed is the Irish one. The rhetoric has calmed in both directions and I would stress that it should stay calm. There is, I believe, realisation that one country’s concerns will not be solved by trying to force a change in another country’s tax arrangements.
While I reiterate our longstanding national position, we are all working now together on a global solution – I stress global - to aggressive tax planning in the context of the OECD BEPS exercise. I and the Taoiseach and other government colleagues were at the OECD in Paris to discuss this a few months ago, as part of an exercise in planning our post-programme economic strategy.
So, since those days three years ago, relations between Ireland and France have genuinely and consistently been excellent – just as they
should be. My party’s political brethren in the Parti Socialiste won the elections of May 2012 and I was there in Paris on the night President Hollande was elected. We have worked closely with him and his team since, and their understanding of Ireland has been clear including their support for Ireland’s debt sustainability campaign.
President Hollande and his government - although they do not get enough credit for it as far as I’m concerned - have led the debate in Europe for a pro-growth, pro-employment European agenda to complement the agenda of budgetary discipline. France also brings to the table its experience of having a strong financial sector which survived the recent crash a lot better than others.
This year, in January, I received proposals for St Patrick’s Day ministerial political and trade programmes all over the world, as is normal every year for a Minister for Foreign Affairs and Trade. One of the perks of that job is that you get to choose where you go yourself...and, despite the tradition of someone in my role going to the Unites States, I picked Paris!
That was deliberate. I sought a substantial programme which included meetings with the President, Prime Minister and Foreign Minister. The programme included extensive direct engagement with Irish and French business, including contract signatures of benefit to both countries. (...and, by coincidence it coincided with Brian O’Driscoll’s last game and a rare win against France at Stade de France!). The President and I had an excellent meeting...fortunately it took place before the game.
Seriously, though, with President Hollande and the Prime Minister we agreed on deepening our bilateral relations even further in areas ranging from blue growth – business harnessed from the sea – to enhanced training/education programmes and other areas. Perhaps some of you can work with us on those.
With Foreign Minister Laurent Fabius, I shared our experience of expanding a foreign ministry’s trade brief. He has since assumed responsibility in this area and our two ministries keep in close contact, including through our Embassies.
The further deepening of Franco-Irish relations will continue, and we watch closely as difficult economic steps are taken in France as elsewhere in Europe.
I spoke earlier about Ireland’s renewed engagement with the outside world and have gone into detail about France. This engagement also applies across the globe, where most of you do business yourselves, or at least hope to do business someday soon.
We’re proud of Ireland’s contributions in the foreign policy and development spheres over many decades and I have ensured that contribution continued and grew, including through our OSCE Chairmanship and our successful candidature for the UN Human Rights Council. I also worked to protect the reach of Ireland’s diplomatic network, going on to expand it earlier this year. Last October, I also launched a comprehensive review of Ireland’s foreign policy and external relations. That work should conclude soon.
I might turn back to the European Union. It was within the Union and individually with Member States that we most needed to re-engage after 2011. That’s one major reason why we invested so heavily in our EU Presidency last year, to prove our renewed constructive engagement with the Union.
The other major reason, obviously, was to get things done for European recovery. And to bring Ireland’s recovery experience to bear on that work. We were very satisfied with the results, from Banking Union to the EU-US trade negotiations mandate and all the various programmes from CAP and CFP to Horizon 2020, infrastructure supports and Erasmus Plus, among others. At least one of these measures will impact on your businesses and the intention is that the impact will be positive.
As President of the General Affairs Council, I led on the Multiannual Financial Framework – the EU Budget for 2014-2020 - and spent many days and hours with our European Parliament and Commission colleagues to iron out that €960 billion deal. A key partner in this exercise was recently-re-elected French MEP Alain Lamassoure.
That experience, with its satisfying outcome despite some difficult negotiations, taught me one thing in particular. That when the Union – complex and all though it is – sets about a task which makes a real difference, as any trillion-euro investment package would, it can get results. In short, the Union can take hard decisions when it wants to.
For that reason, frankly there is perhaps a little too much obsession with the current “top jobs” issue in the Union. Its future leadership is important, of course, but it is one step of many. I believe we should and we will have that leadership in place this summer. It’s far more important what the Union starts DOING again, and soon.
Look at what the EU can do when it puts its mind to things. In a matter of days on 1 July, roaming charges are to fall further thanks to collective EU action – so your next roaming calls, emails and texts when in France or elsewhere will cost less again, saving money which can diverted into other areas of business development. We need more of that.
We need to push ahead with what makes a difference:
· An EU-US trade agreement
· A digital single market
· Up-to-date data protection laws which protect consumers and boost e-commerce
· Encouragement for Europe’s more traditional industries such as the food sector
· Completion of Banking Union, with consequent improved credit supply.
· Energy policy
· Support for innovation and research
These are areas where the groundwork is done and political courage and decisions are now needed.
Our people, our citizens still do not feel the recovery that is there in statistical terms, despite the increasingly positive economic projections from the Commission. They still feel the residual effects of this recession and are stretched, to say the least, by the sacrifices they have made.
So the Union needs to stop talking to itself about itself, as soon as possible. It needs to resolve its personality issues. Let’s get down to work and take decisions for growth and for jobs.
Decisions which open trade opportunities, not close them. Decisions which, for example, make Europe the globe’s digital hub as part of that effort. Decisions which – ultimately - people feel, as families, as workers, as taxpayers, as entrepreneurs and as consumers.
And let’s start a discussion now – for decision soon, in my view – on changes to economic rules that can permit pro-growth investments, especially now as a more meaningful upturn is falling into place.
I welcome the incoming Italian EU Presidency’s thinking on this matter. Sure, we have fiscal rules now that should prevent a similar crisis happening again – I know these very very well from our Stability Treaty referendum two years ago - but the other side of the transaction must be meaningful growth.
Across Europe the people still, as I said, do not feel the positive effects of recovery yet. The disconnect from the political system is clear too, so we all need to listen a lot more and respond a lot more – not in any knee-jerk way but with measures that make a difference.
Part of that listening should include the Brussels-based leadership travelling regularly to member states, meeting their parliaments and engaging with the people.
Overall, ultimately people prefer doers to talkers – an action-focused EU for the next five years will help turn that tide we saw across the continent in last month’s elections.
Conclusion
Now, in the spirit of listening that I have been talking about, I would like to listen to you. What you think of Ireland and where you think France, Europe and other matters are going next. I look forward to hearing the perspective of our BNP guest as well just now.
I commend the Ireland-France Chamber for its work and I particularly appreciate its long-standing motto about France and Ireland – “Partners in Europe”.
I encourage that partnership to grow even further and wish you all well for the future. With the most recent CSO trade figures showing almost €9 billion in services and over €6 billion in goods flowing annually between our two countries, we have the strongest basis for doing even better.....
Thank you.