US multinational companies in Ireland have called for a Yes vote in the forthcoming EU Reform Treaty referendum in order to protect Ireland’s competitiveness amidst the rise of threats from eastern Europe, India and the Far East.
The new president of the American Chamber of Commerce and managing director of Microsoft in Ireland, Paul Rellis, said that US foreign investment in Ireland now stands at US$86.3bn. Over 100,000 people are employed by 596 US firms and last year these firms paid over €2.5bn to the Irish exchequer in corporate tax.
An Ireland at the heart of an EU with reformed, strengthened and more accountable institutions is infinitely preferable to becoming a semi-detached obstacle to common progress across a continent.
“A No vote would send a very negative signal to the global business community and is likely to impact on foreign investment in Ireland,” Rellis warned.
Rellis said Ireland needs to concentrate on its long-term competitiveness by investing in education, increasing productivity in public and private sectors, all the while maintaining a pro-business environment.
He also said that critical issues like interest rates, currency rates and the cost of fuel are beyond the nation’s control. “We have to accept that and move on,” he added, pointing that other areas need a clear focus.
“It is especially important to ensure that the agility of our labour force, which is a key strength of our economy, is not given a slow death as a result of strangulation by over-regulation. Realism must be injected into the pay talks in light of the tightening across global markets.
“Labour costs in Ireland are substantially higher than those in eastern Europe, India and the Far East and have increased by substantially more than the eurozone average in the past eight years,” he said.
“Our costs are rising, but cannot be allowed to rise faster than our value rises. We’re seeing increased competition from lower-cost destinations and our productivity growth is falling.”
However, with the right focus, Rellis said, Ireland can enjoy continued success.
In particular, to achieve faster productivity growth, an array of initiatives ranging from inducing technical change and encouraging more effective use of ICT to sorting out infrastructure problems will be vital.
“It is imperative that public spending is targeted towards productive investment that will contribute to real economic growth over time – Initiatives like the National Development Plan, for example, which is focused on making essential investments into Ireland’s infrastructure.
“The commitment to delivering the plan on time and to budget must remain a priority for Government,” Rellis warned.
By John Kennedy