I am delighted to be here today to take part in this event and to talk to you about Ireland and the future of Europe.
St Patrick’s Day gives us an opportunity to reflect on the warm relationship between Japan and Ireland. 2017, I was pleased to discover, marks 60 years of diplomatic ties between our two countries, something which is being marked by event in both countries.
So today I want to talk to you about Ireland’s perspective on the future of Europe, and not just in the context of Brexit.
IRELAND’S FUTURE IN THE EUROPEAN UNION
And let me start by being clear about one thing: Ireland’s future is in the European Union.
Forty four years have now passed since Ireland joined what was then the European Economic Community. In those four and a half decades we have benefitted enormously from EU membership.
It has given us unfettered access to a market of more than 500 million people and has seen a dramatic increase in trade and foreign direct investment.
It has supported job creation, with an estimated 700,000 jobs created in Ireland during the years of our EU membership.
And Irish citizens have the right to move, to work and to live freely throughout the Union.
During that period Ireland has been a major recipient of financial support from the European Union. Between 1973 and 2014 Ireland received more than €70 billion from the EU.
During the same period we contributed approximately €30 billion to the EU’s budget.
Surely the best measure of the success of that investment is that Ireland now contributes more to the EU budget each year than it receives from it.
But more than that, Irish views and interests are now reflected in the policies of the European Union towards the rest of the world. We are no longer a small island on the fringe of Europe, but an active participant in the world’s biggest union.
Membership of the European Union has brought great benefits to our country and remains in our interests.
We value our access to the single market and the benefits our exporters derive from EU trade agreements with other countries.
More broadly, we value being part of a Union with other likeminded countries who share our values and interests
60 YEARS OF THE EUROPEAN UNION
2017 also marks sixty years since the Treaties of Rome – establishing what is now the European Union – were signed.
In the period since then the European Economic Community first grew into the European Community and then the European Union.
It now includes 28 Member States and more than 500 million people. It stretches from the borders of the former Soviet Union in the east to Ireland on the Atlantic seaboard in the west, and from the Arctic Circle in the north to the Mediterranean in the south.
And it has grown from being a Customs Union into a Single Market, with people, goods, services and capital flowing freely between Member States.
Because the Four Freedoms of the Single Market are just that, freedoms. They are not a vague legal concept but the basis on which we travel around Europe and trade around Europe. They are the freedoms that unite us.
Of course it has not all been plain sailing over those sixty years. Of course there have been challenges along the way. And of course there are new challenges we need to address.
But let us not forget the very real achievement of the European Union as it has grown from a union of just six member states to a union of twenty eight.
And as we celebrate the sixtieth anniversary of the Treaties of Rome, let us not lose sight of the vision of the founding fathers in the years following the catastrophe that was the Second World War.
The period since then has been one of unparalleled peace in Europe, and the European Union has played no small part in that. For many Member States whose post-war histories have not been as benign as Ireland’s, membership of the European Union has been part of their road to freedom.
The European Union is rightly described as one of the great post-war peace projects. So it was fitting that in 2012 the European Union itself was awarded the Nobel Prize for PEACE. Why did it receive the award? In the words of the Nobel Committee, it was because the Union and its forerunners had
for over six decades contributed to the advancement of peace and reconciliation, democracy and human rights in Europe.
THE NORTHERN IRELAND PEACE PROCESS
For its part, the peace project that is the European Union has played a key role in the peace process in Northern Ireland. One of the EU’s key policies is its regional policy, known as Cohesion policy. Spending in support of Cohesion policy accounts for around one third of the EU’s budget. ‘Cohesion’ means sticking together. It is what the European Union is all about.
In Ireland I am the Minister responsible for Cohesion policy, and one of the ways the European Union has supported the peace process is through the PEACE Programme between Northern Ireland and the border region of Ireland. Over a period of more than 20 years the EU has provided significant funding to support the process of peace building and reconciliation in the region.
Last December I travelled to the border city of Derry in Northern Ireland where, along with my Northern Ireland counterpart, I visited peace projects funded by the European Union.
The progress that has been made since the Good Friday Agreement in 1998 was really brought home to me by when – in the company of a unionist Mayor and a republican Minister – I walked across the spectacular EU-funded Peace Bridge that lies at the heart of the city and brings the two communities together.
The Irish Government is determined to see such programmes continue, even after the UK leaves the EU.
The Irish Government has also emphasised the need for the swift resumption of the power-sharing institutions after the recent elections in Northern Ireland, and we will remain closely engaged with the political parties and the British Government in the days and weeks ahead.
THE FUTURE OF THE EUROPEAN UNION
Next week, sixty years after the historic Treaties were signed at a ceremony in the Palazzo dei Conservatori on the Capitol Hill in the heart of Rome, EU Heads of State and Government will gather in the city to mark the occasion. As well as recalling the achievements of the Union, they will discuss the future direction of Europe. I hope it will be a lively discussion.
Recently the European Commission published a stimulating White Paper on the Future of Europe. It is an important contribution to the debate and its publication is timely. I have no doubt there will be many other contributions over the coming months to what will be an important debate that will have implications not just for Europe but also for the wider world.
And I hope it will be a positive debate aimed at building on the achievements of the Union into the future.
THE CHALLENGE OF BREXIT
The sixtieth anniversary of the Union will also see the start of a process that will lead to the first Member State leaving it.
Like most people in Ireland I was disappointed that the UK – our closest neighbour – made the decision to leave. Like most people in Ireland, I believe the UK has been stronger because of its membership of the EU. And I believe that the EU has been stronger because of UK membership.
But we accept that the UK will be leaving the European Union. We are under no illusion about the nature and scale of the challenged posed by Brexit. And we are prepared.
Our priorities for the negotiations ahead are clear:
- we want to minimise the impact of Brexit on trade and the economy;
- we want to protect the peace process in Northern Ireland;
- we want to maintain the Common Travel Area between Ireland and the United Kingdom;
- and we want to influence the future direction of the European Union itself.
Because we cannot allow the future of the European Union to be defined by one Member State leaving it. We need to look to a future of a stronger, vibrant Union.
IRELAND’S ECONOMIC OUTLOOK
Ireland is the EU member state that is most likely to be impacted by Brexit. But we are well placed to deal with that challenge.
The recovery in the Irish economy is continuing at a robust pace. GDP grew by 7.2% in the fourth quarter on an annual basis. As a result, full year growth of 5.2% was recorded for the year.
The exporting sector appears to be holding up reasonably well despite the weakness in sterling.
Private consumption has softened in recent quarters but is still solid with annual growth of 3% recorded in 2016.
Recovery is perhaps most clearly evident in the labour market with annual employment having increased in each of the last seventeen quarters, representing an increase of 212,000 jobs since the low-point in 2012. The number of people in employment has exceeded the 2 million mark since Q2 2016 and is now at its highest level since Q4 2008.
Strong employment gains have helped reduce unemployment which has fallen from a peak of over 15% to 6.6% cent in February.
The growth outlook for this year has been revised downwards by approximately 0.5% reflecting the UK decision to leave the European Union.
Nevertheless the Irish Department of Finance is forecasting real GDP growth of 3.5% in 2017 and 3.4% cent in 2018 in the Budget 2017 forecasts
Domestic demand is set to drive growth this year with strong contributions expected from both consumption and investment spending.
While the indicators of domestic activity are encouraging, the international outlook, including Brexit, illustrates the need for caution supported by prudent economic and fiscal policies.
The prudent economic and fiscal policies implemented over recent years have placed Ireland in a stronger position to weather this shock. Competitiveness has improved, employment has grown, and unemployment has fallen.
The strong economic recovery of recent years is testament to our resilience.
The best way to deal with such risks is through competitiveness oriented policies and prudent management of the public finances. That is what the Irish Government will continue to do.
60 YEARS OF IRELAND AND JAPAN
As I said at the outset, Ireland and Japan have sixty years of close cooperation.
Over those sixty years we have developed an important business and trading relationship. Japan is Ireland’s eighth largest export market and is the largest source of foreign direct investment into Ireland from Asia.
Bilateral trade between Ireland and Japan is worth more than €7 billion a year, and we are very fortunate that more than 50 Irish companies are active in the Japanese market. Many of those have developed a substantial presence on the ground, and have found the Japanese market to be full of potential.
On the other side of the coin, there is continued strong investment by Japanese companies in Ireland. They are among the longest established and most respected overseas investors and employers in Ireland.
Ireland and Japan are likeminded countries. We are committed to human rights, to the rule of law and to the peaceful settlement of disputes. We have shared values in the United Nations, in Development Cooperation and in issues such as Disarmament and Non-Proliferation.
This is a relationship we want to see prosper and grow. And we have a lot to offer:
- we have a strong pool of highly skilled, multilingual workers in the only native English speaking country within the EU and the Eurozone, providing barrier-free access to an EU market of over 500 million consumers;
- 40% of the population is under 29, giving us the youngest population in the EU;
- our education system ranks in the top ten in the world and over 50% of Irish 30-34 year olds have a third-level degree – higher than any other country in the EU;
- the Competitiveness Index ranks Ireland first in the world for the flexibility and adaptability of its workforce;
- we offer a pro-business environment, attracting 9 out of 10 of both the world’s top pharma and top software companies;
- our dynamic research and development eco-system continues to go from strength to strength, reflected in our enhanced performance in the EU’s Innovation Union Scoreboard.
Ireland consistently ranks as one of the best countries in the world for doing business – a testament to Ireland’s favourable business and regulatory climate.
And we offer an attractive location for people and companies looking to establish or expand operations in the EU.
EU-Japan Free Trade Agreement
Ireland is fully supportive of the EU trade negotiations with Japan. The Agreement will hopefully be a positive achievement for the EU and Japan, who together account for more than one third of the world’s GDP.
An ambitious free trade agreement with Japan will open opportunities for our exporters and companies across a wide range of sectors. And an agreement with Japan will send a powerful and positive message on global trade and the value of these agreements.
Ireland would like to see a comprehensive and ambitious agreement concluded as soon as possible. We hope that Japan will continue to engage actively in the negotiations to achieve an ambitious agreement.
LOOKING TO THE NEXT SIXTY YEARS
So I am delighted to be here on the eve of St Patrick’s Day to reflect with you on the last sixty years of Ireland’s relationship with Europe and with Japan. But I also want to look to the future.
Despite the challenges we face, I look to the next sixty years with optimism. In particular I look forward to a broadening and deepening of the relationship between Ireland and Japan and the European Union.
To the next sixty years.