ADDRESS BY PRESIDENT MCALEESE AT THE NUEVA ECONOMIA FORUM MADRID MONDAY, 21ST MARCH, 2011
ADDRESS BY PRESIDENT MCALEESE AT THE NUEVA ECONOMIA FORUM MADRID MONDAY, 21ST MARCH, 2011
Señora Presidenta de la Comunidad de Madrid
Señor Presidente del Nueva Economía Fórum
Ehibajadores, Ministro
Señoras y Señores
Estoy realmente encantada de estar en Madrid. Aprecio mucho su participación en este Foro esta mañana. En particular, quisiera agradecer a la Presidenta Aguirre sus calurosas palabras de presentación y bienvenida. Teniendo en cuenta la sobrecargada agenda que tendrá agradezco especialmente su presencia hoy entre nosotros. Mañana de nuevo disfrutaré de su compañía durante nuestra visita conjunta a uno de los colegios bilingües de la Comunidad de Madrid.
Así mismo debo expresar mi agradecimiento al Fórum y a Presidente Rodríguez, por ofrecerme la oportunidad de estar hoy aquí.
It’s a great pleasure to join you here on the first morning of my official visit to Spain. Spain holds a special place in the hearts of many Irish people with our close friendship dating back centuries. Ortega y Gasset once asserted that there existed a form of prejudice in countries of the North “not to listen to any Spanish voice capable of clarifying things, or to hear it only after distorting it”. I can confidently assert that Ireland has never been party to such a perspective. Indeed, Ireland has always paid particular attention to the voice of Spain, and continues to do so. I have been privileged to witness the extraordinary transformation that has taken place in contemporary Spain since the transition to democracy. The recent anniversary of the events on 23 February 1981 reminds us all of the vibrancy and strength of contemporary Spanish democratic institutions.
Each of our countries has undergone remarkable change in the past three or four decades. A common thread in that experience has been our partnership within the European family. We have exploited the potential offered by the free movement of goods and people within the European single market. Our infrastructure and our human resources have been developed through the solidarity and commitment to a cohesive Union which underpins the Treaties. We have both given back, as well, through our contributions to the Union’s policies, and taking our turn at the Presidency of the Council. I applaud the successful Spanish Presidency of 2010 and the very positive bridge-building role that Spain has played over recent decades in deepening relations between Europe and Ibero-America.
Today in Brussels, Spanish and Irish Ministers along with all their EU counterparts are working together on addressing the terrible humanitarian situations that are occurring in Japan and Libya. While each is very different in its cause and context both are inflicting awful hurt on their respective people and warrant an effective response by the European Union and, indeed, the wider international community.
The Union moves from one challenge to the next and, in overcoming each, it becomes stronger, wiser and deeper. I believe it is important that in these testing times we do not forget the distance we have travelled together and how much we have achieved. It is clear that today’s economic crisis can only be tackled through an effective response at European level. Our responsibility is to work together to address the distortions and imbalances which have been created, particularly in the financial sector. Our common currency is fundamental to our economic well-being. We are all committed to preserving our monetary union and to ensuring that the right decisions are taken to coordinate common economic policies to underpin that union. Concrete decisions to address our problems will be taken later this week by the European Council.
I am convinced that, as in the past, we will overcome the problems that face us for that is what Europe calls us to be – problem-solvers who draw on a wide constituency of experience and wisdom, as well as a common value system, as we build a European Union and a Eurozone robust enough to withstand the shocks and damage that nature and human nature can inflict. Ireland and Spain share a vital interest in ensuring that the European Union that emerges from this problem-solving process is a united, strong and effective vehicle par excellence for building our individual and our shared futures.
In recent times, Ireland has rarely been out of international media headlines. In recent days, that attention was to mark our national holiday, St. Patrick’s Day - a joyful celebration spread around the world by our global Irish family and open to all who consider themselves a friend of Ireland. We’ve also been the subject of attention for much less positive reasons, as the recent years of economic buoyancy gave way to crisis. I’m delighted that you have each chosen to be here this morning and to be part of a more probing discussion about the complex picture behind the headlines.
The recently-elected new Irish government has made it clear that its agenda will be dominated by recovery, renewal and restoration. This is not blind optimism. Ireland has a firm, solid base on which to build our recovery and intensive efforts are underway to correct our public finances, increase our competitiveness and stabilise our banking system. As a small, open economy, we were more quickly and more deeply impacted by the recession than others. But it is precisely due to our small size, our openness and our flexibility that we are confident in our recovery. An export-led recovery is already making itself felt. GDP and GNP both grew in the third quarter of last year and most commentators are forecasting that the economy will grow by about 1% this year. Industrial production is up and the purchasing managers’ indices are particularly encouraging. We are investing heavily in innovation in order to boost our productivity. Indeed, the New York Times reported recently that output per hour in Ireland is higher than in the United States.
This is not to say that we should be complacent or believe that a full recovery and return to sustainable prosperity will happen without a great deal of effort and sacrifice. Each Member State has to undertake the necessary steps domestically in response to the crisis. I know how much Spain has done to restore confidence in the economy and the courageous measures that you have taken. In Ireland too, we have moved quickly and decisively to deal with the consequences of the international crisis which hit us with particular force. It not only led to a sharp contraction in the domestic economy and in the public finances but it exposed deep-seated problems in the Irish property and banking sectors.
We have had to address each of these severe problems and have taken necessary but painful steps to reduce public expenditure while, at the same time, increasing revenues. We are reducing, restructuring and recapitalising our banking system and have introduced fundamental reforms in our system of financial regulation. Last November we agreed a programme of assistance with the EU and the IMF which gives us the financial support and, importantly, the time we need to restore market confidence in our economy. We recognise the need to close the gap between spending and revenue and we expect to bring the deficit below 10% of GDP this year. This will be a great improvement on last year and we are committed to reducing the deficit to 3% of GDP. Tax revenue has stabilised, discretionary spending has been reduced significantly and we expect to record a balance of payments surplus this year.
Competitiveness, which had threatened to be problematic in Ireland before the recession, is showing a great improvement. Prices have fallen at a time when they have risen elsewhere in Europe. Rents have also fallen and the Government is working with businesses to help them reduce their energy costs. A quarter of our companies have cut salaries by 12% while public sector salaries have been reduced by an average of nearly 15%. The European Commission has forecast that unit labour costs in Ireland will fall by 9% in the period between 2009 and 2012 at a time when these costs in the euro area as a whole will rise by 5%. For those who have not yet experienced the famous Irish welcome, I would also point out that this enhanced competitiveness also extends to our tourism sector which is providing remarkable value.
The pragmatic, rational and resilient response of the Irish people to today’s problems has been impressive and reassuring. There is a national determination to learn well from past mistakes and to endure this tough phase of economic retrenchment to ensure our recovery happens and is strong and sustainable. It is not the first time Ireland has faced and faced down serious difficulties. Nor is it the first time we have needed the support of our European friends, as the Spanish will know from their history books, and we are grateful for the solidarity shown to us.
It is important to remember that we have considerable strengths working in our favour – not least the fact that the benign factors that supported the growth and transformation in our economy in the 1990s are still in place and are helping to bring about a dramatic improvement in Ireland’s competitiveness. International surveys point to other key Irish strengths - a favourable business environment, a very well-educated, young, highly-skilled and adaptable workforce, openness to new ideas and high levels of productivity. We also have the youngest workforce in Europe, with 36% of the population under the age of 25, and we are investing heavily in innovation in order to boost our productivity and to prepare for the future.
The free flow of ideas and the cross-fertilisation that comes with innovation are vital to success in the twenty-first century smart economy. Research, Development and Innovation in Ireland is driven by an exceptional level of collaboration between industry, academia, government and the regulatory authorities. Our R&D spend has trebled across the economy in the past decade. The exciting work being done in this collaborative environment was an important factor in the selection of Dublin as the 2012 European City of Science.
For all these reasons, Ireland remains a deeply attractive location for foreign direct investment and, in the past year, the world leaders in high-tech sectors like pharmaceuticals and IT have expanded or increased their research and development capacity in Ireland. The Irish Government is strongly committed to the retention of our stable corporate tax regime and our infrastructure, our business culture and our dynamic well-educated and innovative workforce all add to our appeal. Ireland’s long history as a base for multinationals has also brought about an exciting new synthesis, encouraging indigenous entrepreneurs to build on the success of the multinationals to create highly-skilled, market leading businesses.
My message to you today is that Ireland is wide open, welcoming and eager to do business. The many multinational companies based in Ireland, including leading Spanish firms, see the country not only as an excellent place to do business, but also an enjoyable place to do business; a place where innovative people are doing truly exciting things in a warm, friendly business environment, because after all human relationships are at the heart of all business. We will continue to work with our Spanish trading partners and investors and with all potential investors to deliver jobs, investment and growth for our people and a good outcome for those who invest in us and our people. After a calamitous chapter in our history, the Irish people have turned a new page and they are facing into the future with faith, hope, optimism and determination.
This week is an opportunity for two old friends, Ireland and Spain, to take time to remember again the richness of our shared historical legacy and to contemplate the potential of our relationship as partners in the European Union. Promoting our economic relationship is a key aspect of my visit and I am delighted to be joined here this morning by senior representatives of Enterprise Ireland, the State Agency responsible for the development and growth of Irish enterprises in world markets; of Tourism Ireland; of Bord Bia, the Irish Food Board; and IDA Ireland, which is responsible for inward investment. In addition, we have senior representatives of many Irish companies, including the CEOs of Aer Lingus and Primark, two companies that are active in the Spanish market. On Wednesday, I will open an economic forum in Barcelona with President Mas focusing on the pharmaceutical sector, at which a range of dynamic Irish companies will participate.
This focus on our economic relationship takes on an added importance given the economic hurdles confronting both our countries. Irish and Spanish businesses are giving good leadership by working well with one another and I would like to acknowledge the particular contribution of the dynamic Spanish-Irish Business Network, which was set up in 2008 and which has a growing membership, in the strengthening and deepening of these links. Spanish firms who invest in, buy from or trade with Irish companies know at first hand the high standards and excellent quality of Irish goods and services. Spain is our eighth largest merchandise trading partner. Spanish companies such as Ferrovial and Sacyr Vallehermosa are involved in the construction of major projects in Ireland and last year Telefonica announced 100 new jobs in Dublin in a new human resources centre. There are over 1,000 Spanish students registered in Irish university-level institutions and about 250,000 Spanish tourists visit Ireland every year. Needless to say, given your wonderful weather the Spanish can count the number of Irish tourists in even greater dimensions!
On the occasion of Saint Patrick’s Day, I encouraged Irish people throughout the world to take hope, pride and inspiration from past problems transcended and from the strengths we have in ourselves and in our European family. We are problem-solvers - ours is the first generation in centuries to have constructed a workable and working peace in Northern Ireland and to have transformed the historically fraught relations between Ireland and Britain into a formidable friendship and partnership. Yours is the generation that created and sustained vibrant democratic institutions and consolidated Spain’s position at the heart of Europe. Together, we can put these problem-solving skills to work to overcome the problems created by nature and human nature so that we claim the future for the common good.
What is important is that the Irish and Spanish people take the opportunities to invest in ties to one another – ties that bind whether they are economic, political or cultural, for it is these ties, it is that human energy and connectedness that becomes the economic momentum that brings the dignity of jobs and opportunity. Being here in Madrid reminds me in a very real way of the closeness and friendship between our two peoples. We can put figures and statistics on many aspects of our relationship but sometimes things of great importance can’t be summarised in figures. One such item is the hugely warm welcome I and so many other Irish people have received from this great country and I’m thrilled and proud to learn that the iconic Madrid monument of Puerta de Alcala was lit up in green last week to celebrate Saint Patrick's Day and I’m deeply flattered that it will be illuminated again this evening to mark my visit.
This gesture pays an eloquent tribute to Ireland’s special relationship with Spain. I will thank Mayor Gallardón in person later today for this honour, which is deeply appreciated. I thank you also for your kind attention, for your supportive interest in Ireland and for the work you do in nurturing a long standing, valued and dynamic friendship between our two countries.
Míl gracias.