Ireland’s ability to attract indirect investment in future years will pivot on the outcome of this week’s Lisbon referendum, the CEO of IDA Ireland said today. Some 150,000 multinational jobs underpin a further 200,000 jobs here.
According to IDA Ireland, these companies spend €16bn per annum in the Irish economy, €6.7bn in payroll each year and contribute almost half of the corporation tax take in Ireland.
To keep this coming, a “Yes” result will be vital, said IDA Ireland CEO Barry O’Leary.
“IDA Ireland has a unique insight into FDI companies’ requirements and is acutely aware, based on strong client feedback, of the importance a Yes vote will have on the future of foreign direct investment and jobs.”
He said the single European market, which allows companies based in Ireland to sell their goods and services freely throughout the European Union, has been one of the major factors enabling Ireland to secure a disproportionate amount of US green-field investment locating in Europe over time.
“Multinational corporations have invested in Ireland on the basis that Ireland is at the heart of a vibrant and efficient single European market. Conversely, any threat to the continued efficiency of that market would be viewed negatively and be detrimental to future investment prospects.”
A recent article by Dan O’Brien, senior editor at the Economist Intelligence Unit, said: “Ongoing FDI is crucial to the future economic recovery of our island. If the treaty is accepted it would eliminate huge uncertainty and ensure that the economy’s most dynamic sector can maintain existing jobs and create new ones in the future.
“To a very considerable degree, the future of Ireland’s long and bountiful relationship (with FDI) will be decided on October 2,” O’Brien said.
O’Leary said the opportunities presented by the European market to multinational companies investing in Ireland are complemented by the talented Irish workforce and our attractive corporate tax rate of 12.5pc.
“This tax rate is fully compliant with the provisions of all EU treaties and nothing in the Lisbon Treaty changes that position. Furthermore, the Lisbon Treaty provides for a continuation of the current status and any changes that might affect it can only be taken by the unanimous vote of all member states.
“Therefore, Ireland retains its veto in tax matters, thus maintaining international business confidence and ensuring Ireland continues to remain an attractive investment location.
“From IDA Ireland’s perspective a favourable corporate tax regime alone will not attract and retain substantial investment as it is only relevant when a company can operate profitably in the marketplace. The Lisbon treaty enables Ireland to offer both – a low tax regime, but, more importantly, in the heart of a growing European marketplace,” O’Leary said.
O’Leary said it is important to remember the guarantees given by the EU, including Ireland and all other member states will keep a commissioner, Ireland will remain in control of its tax rates, Irish neutrality will not be affected – no conscription, no defence alliances, Ireland retains control over sensitive ethical issues such as abortion, workers’ rights and public services are valued and protected in Ireland and across the EU.
“A YES vote on 2 October and the ratification of the Lisbon Treaty will enable a dynamic single European market to function properly as the EU grows and is crucial from a business perspective,” O’Leary said.
“It will position Ireland to win high-quality FDI providing well-paid jobs, ensuring a future for generations to come.”
By John Kennedy
Photo: IDA Ireland CEO Barry O’Leary.