Speech by An Taoiseach to the US Embassy Annual Economic Conference

Your Excellencies, Distinguished guests, Ladies and gentlemen,

I want to begin by welcoming you to historic Dublin Castle. For generations, some of the most significant events in our nation’s history have unfolded here in this Castle. In recent decades, this venue has also been witness to significant moments in the ongoing evolution of the European Union.

As the centre of operations for our Presidency of the European Union we hope that the next chapter of transatlantic relations will be born out of the work conducted here.

Since I addressed the Embassy conference last year Ireland, the European Union and the United States have all endured continuing economic challenges.

Here in Ireland we have worked hard to bring about a new sense of stability to our national situation. Using this hard won stability as a base we want to encourage further growth and job creation.

Using this experience as a template that could be beneficial to Europe we identified our Presidency priorities as Stability, Jobs and Growth.

Having worked hard to bring about a new sense of relative stability it might be easy to fall into the trap of easing off necessary plans to grow our economies.

There is no time for any complacency and now is the time to make the big changes that will lead to new opportunities for our people.

At a time when we continue to experience unacceptably high levels of unemployment and weak economic growth, the priorities of jobs and growth remain vital.

They are essential to securing the social and economic well-being of Europe and America.

This is why the Irish Presidency has put such a focus on a historic trade agreement between the United States and Europe.

Many of you gathered here today will be key participants in shaping the agreement that we eagerly anticipate. This is a time for leadership and conviction, for vision and courage.

The benefits of an EU-US Free Trade Agreement will drive new enterprise, create more jobs and solidify the EU-US relationship as the economic engine of the world. It will also have the potential to set down global conditions for trade and trading relationships.

The Transatlantic economic relationship
As you all know we are starting from an already-strong base. The EU and the US already enjoy the most integrated economic relationship in the world. Together, our economies account for about half of the world’s GDP and contribute to almost a third of the global trade flows.

The transatlantic economy generates $5 trillion in total commercial sales a year and employs up to 15 million workers.

Together, this represents the largest and wealthiest market in the world, accounting for three-quarters of global financial markets and over half of world trade and world GDP.

Yet despite the strength of our existing relationship, there is still enormous untapped potential in EU – US trade relations. If we can successfully unleash this potential, we will undoubtedly derive enormous benefits in terms of growth and jobs, on both sides of the Atlantic.

Closer engagement and co-operation also brings new ideas and new innovation. Together the EU and US are already at the forefront of research and development and in developing new technologies.

By investing in the EU-US trade potential, we are not only creating jobs in the short term, we are also ensuring the long-term sustainability of our economies’ competitiveness, and helping to secure a more prosperous future for our peoples.

Given all these enormous benefits I am pleased that real momentum is now evident in the quest for a transatlantic trade agreement. In a world where change happens at bewildering speeds these developments are essential.

Political Support for a TTIP
For the past twelve months, as we have sought to build support for an agreement, I have engaged extensively with political and business leaders here in Europe and in the US.

I had the opportunity to raise the matter directly with President Obama while visiting the White House last month. I also met with Vice-President Biden and senior members of the US Senate and Congress, and was pleased to hear of their commitment to advancing a transatlantic trade and investment partnership, and a determination to succeed with the forthcoming negotiations.

Ireland has always recognised the great potential in developing further trade links with the US. Since coming into Office I have prioritised developing these links and have personally visited 11 US cities to help foster new trade and new opportunities.

Even in the few short months since Ireland assumed the EU Presidency, events have moved forward rapidly. We have clear political consensus in Europe and the US about the benefits of a trade agreement, and the imperative for ensuring successful negotiations.

Both sides have now started internal procedures that will lead to the formal launch of negotiations at the earliest opportunity.

Here in Europe, the draft mandate from the EU Commission was approved by the College of Commissioners and transmitted to the Council on 12 March.

I met with the US Chamber of Commerce in Government Buildings this morning. I am encouraged to hear that there has been further progress here in Dublin over the last two days.

I understand that there is broad support amongst Member States to seek to agree a mandate at the Trade Council on 14th June and it remains the Presidency’s strong intention to do so. This means the first round of negotiations could commence as early as July.

We shouldn’t lose sight in all of the political activity of the ultimate goal of such an agreement – to create new jobs for our people on both sides of the Atlantic.

Government Plan for Economic Recovery
This Government was voted into Office with a straightforward task: to sort out our economic problems and to get Ireland working again.

Two years ago, we inherited an economy in freefall, 250,000 jobs had been lost, unemployment was soaring, the public finances were out of control, the banks were on the brink of collapse, the country was locked out of the international bond markets and had suffered the ignominy of IMF/EU bailout.

Ireland’s international reputation was in shreds.

We immediately set out our plan for economic recovery and have been working with the people ever since to implement it.

That plan is working.

Confidence is returning. Investment is growing.

The economy has returned to modest growth for three years running.

Private sector employment levels have grown by an average of 1,000 per month over the last 15 months, and unemployment has begun to fall.

There is light at the end of the tunnel.

Restoring Financial Stability and Confidence
While the first two years of the Government’s plan prioritised building stability the focus of the plan will now look to accelerate a number of key areas, such as:

Continuing to bring our national finances under control;
Working out the legacy of personal and mortgage debt;
Creating badly needed jobs for our people, and
Continuing to implement long overdue reforms to our public services and political system.

Restoring Ireland’s reputation for responsible financial management is at the heart of our plan to get Ireland working again. It is a prerequisite for job creation and investment.

Over 9 separate Troika analyses we have implemented every single condition of the IMF-EU programme in full.

The correction of the public finances is on track. The reduction in the deficit is on target, over 80% of the fiscal consolidation is complete and we will ensure that our borrowing falls below 3% of GDP by 2015. Long term sustainable recovery depends on hitting this target.

In order to cut interest rates and attract more investment, we renegotiated the bail-out agreement to reduce its cost.

Interest rates have been cut on the EU bail-out loans to reduce the long run cost by €9 billion, and last week their maturities were extended to an average of over 20 years.

The people approved the Stability Referendum, helping to restore confidence by guaranteeing Ireland’s access to the backstop of the European Stability Mechanism.

Long-term Government bond yields are now at less than 4% down from 14%.

By getting rid of the promissory notes and by liquidating Anglo Irish Bank and Irish Nationwide, we have cut our borrowing requirements by €20 billion over the next 10 years.

The surviving banks have been restructured and recapitalised, with new boards and management teams. The bank guarantee has been ended, some stakes in the banks have been sold, deposits are flowing back and emergency Central Bank funding is no longer needed.

The mortgage and personal debt crisis has been one of the most socially and economically painful issues bequeathed to the country by a debt-fuelled property boom and bust under previous Governments. To accelerate the work out of this crisis we have put in place a new comprehensive framework to deal with these issues.

We have enacted new personal insolvency legislation to help distressed borrowers reach a settlement with their lenders while staying in the family home. Banks that have not put in place sustainable solutions for families in long-term mortgage arrears by the end of next year will face financial sanctions.

The consequence of implementing our plan is that we are now on course to exit the IMF-EU programme by the end of this year, while sticking to a path of reducing borrowing and debt to sustainable levels

Helping People Back to Work
But we know we have a long way to go. Financial stability and deficit reduction is but a means to our ultimate end – restoring strong growth to employment and living standards.

There are still far too many people without jobs. The biggest challenge facing this Government is to reduce unemployment by getting people back to work.

My vision is to make Ireland the best small country in the world in which to do business by 2016.

It is important to understand that becoming the best location for business and enterprise is not an end in itself. It’s not for business sake that we do it. But it’s for the people. It’s for them.
Only a successful and thriving enterprise environment can provide the type of opportunities that our people demand. The jobs from a growing economy can support their dreams, fuel their ambitions, and provide for their families.

To this end we have protected our 12.5% rate of corporate tax, and more jobs were created in 2012 by IDA and Enterprise Ireland supported companies than in any year since 2006.

We have cut social security taxes on employment and VAT on labour-intensive services. We have protected public subsidies for research and innovation. We believe in flexibility in building employment experience.

We have also kept our promise not to increase taxes on work and income. This is essential for making work pay and for Ireland’s international attractiveness for jobs.
In fixing the mistakes of the past we are rebuilding the Irish economy by transitioning it from a failed model based on property speculation, banking and debt to a sustainable economy based on enterprise, innovation and exports.

The driver of the reform is our annual Action Plan for Jobs. Last year we successfully implemented 92% of the 270 actions designed to make it easier for employers to protect and create jobs, and we have announced a further 333 actions for implementation in this year’s Action Plan.

We announced a €2.25 billion stimulus in job-rich public infrastructure projects, and will legislate to establish a €6 billion Strategic Investment Fund to finance commercial investment projects in the Irish economy.

We are bringing our welfare system into the 21st century to provide extra supports and incentives for the unemployed to take up job and retraining opportunities and will no longer tolerate an outdated passive system that fails both the unemployed and the State.

We have reformed restrictive labour market practices, overhauled sectoral wage-setting mechanisms, and liberalised previously closed professions.

Cost competitiveness has improved by over 20% since 2009 compared to our EU competitors.

We are now ranked by independent studies as the 2nd most attractive country globally for Foreign Direct Investment.

We are ranked 1st in the eurozone for ease of doing business and 1st globally for the availability of skilled labour.

Conclusion
Ireland is on the hard road to recovery. It has not been easy and is not easy for the Irish people, and there is still a difficult journey ahead.

But I firmly believe that our plan is working, that people’s sacrifices are now paying dividends.

There is growing support for, and confidence in Ireland’s economic future. Our progress can be a model for others.

That’s why European Leadership has to show leadership cooperation and courage in dealing with debt problems, banking union and a real focus on growth and creativity in sorting out unemployment rates, particularly among the young.

We don’t need another generation of young people without hope.

Now is the time to implement the big changes necessary to ensure that economic recovery is both sustainable and long lasting.

The same is true for Europe and America.

The signing of a new Free Trade Agreement between our continents would be a major part in building a more sustainable economy for our people.

To provide the next generation with more jobs and with the promise of fulfilling careers.

That is the legacy we can deliver to them today by making this Agreement a reality.

This new chapter in the relationship between Europe and America can be part of the turning point for both our economies.

Now is the time for leadership and conviction.

Thank you.