Ireland predicted to outstrip EU growth

AN EU think tank says Ireland will have the fastest-growing western European economy between now and 2020.

Simon Tilford, chief economist with the London-based Centre for European Reform was bullish on the economy over the next 12 years, but also highlighted where Ireland is falling down in meeting some of the economic and social targets set by the Lisbon Process.

“Despite the sharp slowdown we’re seeing at present, the signs look pretty good. If I was having a bet I’d still wager that Ireland will be the fastest growing of the western European member-states between now and 2020,” he said.

Mr Tilford, warned, however, that Irish infrastructure will need to improve.

“I’m not just talking about the transport network but also things like telecom services. A country that fails to ensure the rapid roll-out of super-fast telecoms will put its service sector at a potentially serious advantage.”

Irish productivity growth would have to be strong also to offset rising costs here compared with other EU countries, he said in his address to the American Chamber of Commerce in Ireland’s spring business lunch in Dublin.

The Centre for European Reform is committed to improving the quality of the debate on the EU which discusses political, economic and social challenges facing Europe.

Paul Rellis, president of the American Chamber of Commerce said “in the years 2006 – 2007, GDP growth in Europe outstripped that in the US and some 8 million jobs were created across the EU. This shows the strength of the EU marketplace and the benefits which emerge when the EU states work together to achieve common goals, such as those identified in the 2000 Lisbon Process”

On the proposed Lisbon Treaty, he said ratification of it would provide a more effective Europe acting as a single trading area.

As a result, Irish business will be able to exploit more effectively this market of 500 million consumers where the US-EU trade relationship is valued at $4 trillion (€2.6tr).

“Ireland must be at the centre of Europe if it is to benefit from its share of this strong trading relationship also,” he said.

Meanwhile, economist Dan McLaughlin says the economy could get a positive boost from an interest rate cut before the year end.

While rising inflation has soured sentiment against an ECB rate cut this year, he expects that threat to ease.