US rating downgrade a timely boost for Ireland

IRELAND is a more attractive location for US companies to set up operations as a direct result of Standard & Poor’s stripping the US’s triple A credit rating, according to the Irish Exporters Association (IEA).

IEA chief executive John Whelan said the fall in the value of the US dollar and the general financial crisis is paradoxically making Ireland look a more attractive base for US multinationals, particularly as Irish labour costs have also been falling for the past two years. S&P cut the US rating one level to AA+ from AAA for the first time late on Friday while keeping the outlook at “negative”. S&P criticised the US political system for failing adequately to address deficit reduction.

“The United States is Ireland’s largest trading partner and, therefore, any major jolts to the US economy must be monitored very carefully. The downgrading certainly heralds a changing world order in economic ratings , and may force other trading blocks and, in particular, the EU to tackle their sovereign credit management issues more comprehensively,” he said.