Reformed EU A 'Tremendous Opportunity' For Ireland, Says AmCham

by Jason Gorringe, Tax-News.com, London

29 May 2008

The current EU reform programme, on which Ireland will vote in the forthcoming referendum, presents tremendous opportunities for Ireland, according to the President of the American Chamber of Commerce in Ireland.

Speaking on Monday following a meeting with the Prime Minister, Brian Cowen, Paul Rellis, President of AmCham Ireland and Managing Director of Microsoft Ireland, observed that “2 out of 3 people in Ireland today are employed in the services industry. With a small island economy it is not just about having access to that market in theory that counts. It is having a genuinely fair chance on a really level playing field that will matter most over time".

“A market of over 500 million people in 27 countries needs rules and it needs strong institutions to enforce them. That is especially true for small countries like Ireland. This is not about needless regulation. It is about the essential architecture necessary to ensure stability and inspire confidence for the future," Rellis added.

“Ireland at the heart of a reformed EU and a reformed services market will provide huge opportunities for Ireland and will promote jobs growth, investment and continued economic success for Ireland and its citizens," he went on to argue.

The Irish electorate will vote in a referendum set for 12th June whether to accept the Lisbon Treaty, which replaces the the draft European Constitution rejected by French and Dutch voters in 2005, and which proposes to streamline the European Commission's political decision-making machinery.

It is unclear as yet what the repercussions would be should Ireland vote against the treaty, both in terms of the treaty's future and the reshuffled Irish government's longevity.

However, AmCham has been warning for many weeks that to reject the treaty would be to chip away at the foundations of Ireland's recent economic success.

"The argument that there will be no repercussions for Ireland if we do not ratify the treaty is naïve," Rellis stated earlier this month.

"Our membership of the EU has been instrumental in our current economic success, which has been built on our attractiveness as a location for foreign direct investment and the ability of our indigenous industry to compete on the global stage. To adopt a closed and protectionist position now would be short sighted and seriously impact on our future growth."

Rellis's comments echoed similar sentiments expressed at a briefing in Dublin on 9th April, when he remarked that Ireland's continued membership of the EU was a critical attraction to US companies looking to invest overseas.

US companies have come to acquire a large stake in the Irish economy, and presently it is estimated that over 100,000 people are directly employed in about 600 US firms in Ireland.

This accounts for 70% of all employment supported by IDA Ireland, the government's private sector investment facilitator.

Last year, IDA Ireland announced over 114 new and expansion projects with US companies, with almost two out of every three foreign direct investment projects in Ireland in 2007 having originated from the US.

In 2007, US firms paid over EUR2.5bn to the Irish Exchequer in Corporate Tax (or approximately 40% of total corporate tax take in 2007), and contributed a further EUR12.5bn in expenditure to the Irish economy in terms of payrolls, goods and services employed in their operations.

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