Ireland’s economic efforts are a work in progress – Donohoe

6th March, 2014

Commentators who label Ireland a ‘poster boy for austerity’ insult the efforts of the Irish people

Speaking this morning (Thursday) at the European People’s Party Congress at the Convention Centre Dublin, Minister for European Affairs, Paschal Donohoe TD, said that the recovery that is being felt in the Irish economy is a work in progress and that the Government will not rest until our people are back to work and our country back to prosperity (see full speech below).

Minister Donohoe went on to say that commentators who label Ireland as the poster boy for austerity insult the efforts of Irish people and demean their motives.

“Ireland’s journey over the last number of years has been a difficult one. But we have been making real progress; exiting the Troika bailout unaided, creating tens of thousands of jobs in the economy last year and restoring our international reputation.

“The efforts and sacrifices made by the Irish people have been instrumental in that progress. And the label attributed to Ireland by some commentators that Ireland is a poster boy for austerity insult these efforts and demeans the motives of the Irish people. These efforts have been made with one thing in mind; to get Ireland back to work and create a better future for all of our people.

“If we are to further strengthen our recovery and restore confidence in Ireland we must continue to rebuild competitiveness and fix our national finances. This must receive European support by creating a banking union that can break the link between the sovereign and the banks. We must deepen the Single Market and protect the freedoms inherent in our membership of the Union. Finally, we must build political support by using the Treaties to their fullest extent to respond to the concerns raised by some of our people. We are unwavering in our determination to do this and to steer the ship to calmer waters in a bid to chart a more secure and stable future ahead.”

Speech by Minister for European Affairs, Paschal Donohoe TD, to the EPP Congress 6th-7th March 2014

Check Against Delivery

Good morning delegates and friends. Welcome to the National Convention Centre. I am delighted to welcome you to Dublin and to my constituency of Dublin Central.

Where we have come from:
In assembling now we must reflect on where we have come from.

Two years ago the Union faced the challenge of our basic economic survival. Uncontrolled defaults, sovereign bankruptcies and exits from the euro were heralded by the relentless drumbeat of surging bond yields and prophets from the financial markets.

W.B Yeats, the great Irish poet, describing other challenges wrote:

‘Things fall apart; the centre cannot hold…
The best lack all conviction, while the worst
Are full of passionate intensity’.

Our challenge then was whether the political and economic centre could hold as we faced the challenge of ‘things falling apart’.

Europe responded to this profound crisis. Through efforts by national governments to fix their national finances. Through the response from the European Central Bank and the Commission and most of all from our people.

From Break Up to Keep Up:
We rose to the challenge of ‘break up’. We must now rise to the challenge of ‘keep up’.

Keeping up with the reality that while the acute crisis has passed, it has not contributed to an improvement in the daily lives we would like to see for all.

Keeping up with the reality that, while unemployment is dropping, too many of our young people are without the work and opportunities they need and deserve.

The sacrifices made by our people, Irish and European have been many. If the early part of this crisis was dominated by bond yields, then yielding a return to countries for the changes and sacrifices they have made, and will make, is essential to the restoration of confidence in Europe.

I believe that the best way to yield this return is by supporting the values and freedoms of the Union – not by their weakening.

Located by a Port:
The application of these values is intertwined into the local story of where we meet this morning.

We are located beside a port. This port was our interface with the rest of the world. It was through here that most of our exports left. That trading relationship with the rest of the world has now changed radically.

Exports still leave through Dublin port. But their size, value and nature have all changed. All parts of our economy are now involved in delivering our export performance, from agriculture to financial services.

Services now represent over half of all of our sales abroad, with many of the companies who are driving this change located right next to near here.

Role of the Union:
This change is reflected in the broader Irish change in our engagement with Europe and the world. Ireland has changed from being one of the most closed economies in Europe to the second most globalised in the world.

The Union, its values and freedoms, was essential to this change. A change that was essential to the growth in the living standards of our people and horizons of our country.

However our more recent journey was, and is, extremely tough. Lack of work, work that pays less, and massive changes in living standards have all made life desperately hard for many in Ireland.

Irish sacrifices:
But we are making strong progress thanks to the sacrifices of our people.

We have now successfully exited the EU-IMF programme of support.

We have returned to the financial markets with historically low bond yields of below 4%. And we are on track to achieve our 3% deficit target in 2015, down from 11.9% in 2009.

We have stemmed the flow of job losses, creating 61,000 net, new private sector jobs in 2013. And we are targeting full employment by 2020.

Irish and Euro governance:
But how did we get here?

Through the sacrifice and stamina of Irish people, four steps were taken.

First, we narrowed the budget deficit by implementing a fiscal adjustment equivalent to 20% of our national income.

Second, we reorganized our public administration, asking our excellent civil and public servants to work longer and harder despite their wages being dramatically reduced.

Third, we improved unit labour costs by a forecasted 21% against the eurozone average.

And finally, we acknowledged the strength of our membership of the EU by ratifying the Fiscal Compact Treaty, by helping our entrepreneurs and our companies compete within the Single Market and by working to strengthen European decisions that would help Ireland. The Irish recovery had a vital European dimension.

Some commentators and politicians have described Ireland as a poster boy for austerity. This insults the efforts of Irish people and demeans their motives. The measures taken in Ireland were taken to get our country growing again.

Unfinished business:
But the job in Ireland is not yet complete. This mission not yet accomplished. Too many are without work, the social consequences of the economic crisis are too acute. How we respond to this is essential to restoring confidence in Europe and strengthening the Irish recovery.
Three steps are essential to this.

First – countries must continue with their national efforts to rebuild their competitiveness and fix their national finances. But this must receive European support. Creating a banking union that can break the link between the sovereign and banks is essential to ensuring that national efforts receive their just return. This must unleash investment for jobs and must be supported through bodies such as the European Investment Bank.

Second – standing by, and indeed up, for European values and freedom. Deepening the Single Market, particularly in services and the digital economy, is essential. Crucially, if we want freedom of movement for goods and services, we must maintain the same freedoms for the movement of people. This is the grand bargain at the heart of Europe which we cannot weaken.

Third – building political support within existing Treaties. Political doubts are caused by the worst economic crisis of our generation. We must fix the economic problems and use our Treaties to their fullest extent to respond to the concerns raised by some.

Given our port location some maritime advice appears apt; you cannot direct the wind but you can adjust the sail.

The Union at its best can help direct the political and economic wind. And it provides the best sail for countries in stormy waters.

Our meeting here this week at Dublin Port strengthens our resolve in that regard; to steer the ship to calmer waters and chart a more secure and stable journey ahead.