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IDA says Yes vote is critical to economic recovery

THE forthcoming referendum on the Lisbon Treaty is critical to Ireland’s economic recovery from the current global downturn.

IDA Ireland has a unique insight into overseas investors’ requirements and is acutely aware, based on strong client feedback, that a Yes vote is fundamental to maintaining our base of foreign direct investment (FDI) companies and attracting further investment in the future.

Job creation through FDI depends on Ireland’s full commitment to maintain a central position in the EU. This status has been instrumental in persuading almost 1,000 FDI companies to create more than 150,000 jobs in Ireland. These 150,000 jobs underpin an additional 200,000 jobs in the wider economy.

As one of the most export dependent countries in Europe, access to the single market is critical to Ireland’s economy. Indeed, more than 60% of all exports from Ireland are from FDI companies whose decision to invest here was based on continued free access to the single market from a country in the heart of the EU.

Ireland has long enjoyed the positive impact of EU membership and has received in excess of €58 billion in funding since it joined the EEC in 1973. From an FDI perspective Ireland is viewed, especially by US companies who account for half of IDA clients and provide 100,000 jobs, as a solid base and a trusted gateway into Europe.

Ireland’s position in the EU has proven to be vital in helping us secure a disproportionate amount of the overall investment coming into Europe, a significant achievement considering our status as a small island nation.

With emerging economies like China and India now seeking European market penetration it will be even more important that we appeal to them as a location for investment. We cannot do this unless we are seen to be one of the major advocates of the EU.

The decision by multinational corporations to locate operations in any one country is often a very close call and Ireland must ensure that it places itself in the best possible position to secure these investments and jobs.

The outcome of the previous Lisbon Treaty referendum was met with disappointment by the wider Irish business community, yet I must express my concern that voters may not be fully aware of the consequences should a No vote prevail on October 2.

IDA clients want Ireland to remain central in Europe and support a Yes vote. The perception of anything else creates uncertainty in the minds of investors and will have a detrimental effect on future FDI. By voting Yes we are displaying to potential investors that we are fully committed to the EU. Among the guarantees of the Lisbon Treaty is a further reinforcement that Ireland will remain in full control of its corporate tax rate. A beneficial tax rate is only of importance if we are at the core of Europe, thus enabling FDI companies to be profitable by accessing a market of close to 500 million people.

If Yes does not get a resounding endorsement our commitment to maintaining our position in this market will be hugely diluted.

The decision on the treaty will affect how investors view Ireland. We are currently viewed as a progressive, open and confident country engaged at the heart of Europe. A negative decision by Ireland would damage our existing investments and lessen our prospects for further investments and jobs.

Ireland’s future economic success depends on our full commitment to a strong and confident Europe. We must reinforce our position at the heart of the world’s largest single market and avoid any marginalisation of Ireland or the loss of our strong voice by giving a resounding Yes to this referendum.

Barry O’Leary

CEO

IDA Ireland

Wilton Place

Dublin 2


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