Ireland Must Pivot to Europe – HAYES
Fine Gael Dublin MEP speech to the Irish Society of Actuaries Annual Dinner 16th Feb 2017
Ireland has three core international relationships – with the UK, with the EU and with the United States. Yesterday, the Taoiseach set out Ireland’s strategic response to Brexit. He made it clear that Ireland will stay in the EU and stay in the Eurozone. To do otherwise would be a serious mistake. Now is to the time to pivot towards Europe and make it clear that Ireland’s future is within the EU.
I welcome the decision of the government to publish shortly, a Trade and Investment Strategy around the St Patrick’s Day celebrations. Trade negotiations will be a central aspect of the EU/UK Brexit negotiations. These negotiations will be of critical concern to Ireland.
Trade figures for 2016 published by the CSO this week make for some interesting reading. Goods exports are up by 4%, reaching a record €117 billion and Ireland has a trade surplus of €42.2 billion, which is very welcome indeed. It is worth looking in more detail at some of the trade figures.
In 2016 the value of goods exported to Great Britain was €13.3 billion – 11.4% of total exports. Exports to the rest of the EU amounted to €46.3 billion – 39.6% of total exports. The export figures also show that 49% of Irish exports are to non-EU countries; this figure reflects how international the modern Irish economy is.
The trend of exports in recent years also indicates that exports to Britain have remained static or even declined. In fact, exports to Britain declined by 4% in value in 2016. Though this might have been due to currency fluctuations. In contrast, exports to the rest of the EU have shown a steady increase since 2010, increasing by more than €6 billion per annum since 2010.
There are those who are arguing that Ireland should follow the UK into the unknown. I would like them to look at Ireland’s trade figures. I would also like them to look at the consequences for FDI in this country if we decided to leave the EU. I would like them to specifically address the issue of Ireland’s membership of the Eurozone and what might be the consequences of leaving the Eurozone.
Last year we saw the impact of the Brexit vote on the Euro/Sterling exchange on exports and cross border trading. The British have effectively seen a depreciation of about 15% in the value of sterling. As inflation takes hold in the UK with rising import costs – it is inevitable that the British economy will weaken. Ireland remains vulnerable to Euro/Sterling exchange risks. This risk will remain for the some years.
Part of the response to Brexit must be a pivot to Europe. This does not mean neglecting the British market – geography dictates that Ireland and Britain will always have the closest of trading links. Brexit does mean however, that Ireland must deepen our trade links and increase our exports to the rest of the EU. The new communities from EU countries will have an important role to play in developing trade links. In this regard, it is interesting to note that trade in goods between Poland and Ireland in 2016 was valued at almost €2 billion.
New markets in mainland Europe are particularly important for the Agri-Food sector, the tourist sector and Irish SMEs, all of which are heavily dependent on the British market. Bord Bia, Enterprise Ireland and Tourism Ireland have a huge responsibility to help and support these sectors to grow market share in mainland Europe. Even without the UK the EU will still be a Single Market of 450 million people – the largest and most prosperous single market in the world. SMEs in particular will need tax breaks, marketing and promotional support to break into European markets.
Younger people in all survey opinions are more pro-European. We have to improve language proficiency in our schools and colleges. Students need to be encouraged to work and live in non-English speaking countries. Our universities and third level colleges should be setting targets and supporting students to take up Erasmus exchange programmes. I also believe the government should introduce a new scholarship programme, jointly with business, wishing to sponsor young graduates willing to spend a year in mainland Europe on a mixture of work experience and job training placement.
CSO figures show that exports to the United States reached just over €30 billion in 2016, an increase of 12% on 2015. The dollar has been strong against the euro and is likely to remain so during 2017. Despite the tough talk of Tariffs and Protectionism from the Trump administration, a strong dollar provides great opportunities for Irish exporters of goods and services to a key export market. The passing of CETA this week in the European Parliament opens new opportunities with Canada.
Brexit will be challenging but it will also provide opportunities. It will be a marathon rather than a sprint. The outgoing US ambassador, Kevin O’Malley, made the point in his final speech that post Brexit Ireland will become even more attractive for investment. There will also be opportunities in the financial services sector and in higher education.
We are living in a period of political struggle and profound technological change. Success will depend on our capacity to respond to change, to be flexible and to identify opportunities. Nevertheless, let us remember this; the EU has transformed Europe and has transformed Ireland – economically, politically and socially. Ireland is now an open, dynamic, progressive country. Ireland is one of the top ten most developed countries in the world, according to the UN Human Development Index.
The EU is not just about economics; the EU is also about values. The EU value system is about democracy, freedom of the press, the rule of law, equality, workers’ rights and above all respect for the dignity of individuals in all their variety. These are values worth defending. Next month we will be celebrating the 60th anniversary of the Treaty of Rome.
In many respects, the EU has been a Peace Process for Europe. In the first half of the last century historians estimate that perhaps 80 million people died violently in Europe. Since 1950 apart from the violence in the former Yugoslavia, Europe has been relatively peaceful compared to previous generations.
But what happened in Yugoslavia in the early 90s and what happened in Ukraine more recently is a reminder to us of Europe’s violent past and a warning to us of what Europe could again be. Ireland is a small country with an economy integrated into an increasingly globalised world. Our future is with the EU – it is something we should proclaim openly and with pride.