‘Stimulus needed’ for Irish exports

By Joe Dermody

Wednesday, October 14, 2009

INDIGENOUS Irish companies need export stimulus packages to survive the trading crisis caused by the collapse of sterling, the Irish Exporters Association (IEA) is demanding.

IEA chief executive John Whelan said that at least 27,400 jobs have been put under threat, with thousands more workers already on three-day and four-day weeks to cope with thesterling crisis.

Mr Whelan said Irish exporters to Britain have effectively lost €200,000 from every €1 million in sales over the past 12 months. Yesterday’s 93.5c valuation of the pound means sterling has fallen 21% since this time last year.

John Whelan explains: "Two-thirds of all indigenous exports go to the UK, and those figures are down 10% from January to June. It looks like July, August and September figures will be down 23%. We are looking at export figures to the UK being down €1.9 billion this year.

"This perilous situation has not been properly acknowledged by the state. Only €50 million of the stabilisation fund will be spent this year. Even the full €100m is very small peanuts compared to the funds in the UK, US and China. A minimum stimulus package of €1bn is needed.

"The UK takes 43% of our food exports. We are looking at other countries, but you cannot ignore a market of 60 million people on your doorstep. The situation is teetering on a knife edge, even more than is shown by the figures. We need action to keep more people from joining the dole queues."

The IEA chief executive is also suggesting a reopening of the Employment Support Scheme, which was launched in August with a €250,000 fund, then closed again in August. He suggests a new approach to the regulations, saying companies should also be able to avail of export credits, and that the European Union should relax its present €250,000 cap on state funding for private companies.

"We are in unusual and exceptional circumstances," said John Whelan. "The Government needs to ask Brussels."

Meanwhile, Bord Bia has been encouraging Irish exporters to break into new European markets, which should in time reduce Ireland’s traditional reliance on sterling. Mr Whelan welcomed this initiative, but noted that companies would need export tax credits and the other supports outlined above to fund any drive into the eurozone.

"We do need to expand into Europe, but more capital needs to be spent on packaging and marketing, geared towards that specific market," he said. "However, most companies don’t have the necessary spending reserves, which is another reason why the €1bn stimulus package is so critical.

"This is a very difficult time to be a member of the exporting community. This is the most traumatic time most of our members have ever experienced. The Government needs to show that it fully acknowledges their plight."

This story appeared in the printed version of the Irish Examiner Wednesday, October 14, 2009