Riding the green wave

THE SLOVAK population in Ireland, estimated at 20,000 Slovak citizens, has integrated into Irish life and “is very well respected for its strong work ethic”, says Anne-Marie Callan, Ireland’s Ambassador to Slovakia. The Irish-Slovak connection will become even more visible on St Patrick’s Day, when for the first time ever a building in Slovakia will go green as a symbol of friendship with Ireland. The Slovak Spectator spoke to Callan about Ireland’s recent EU-IMF programme exit, business links between the two countries and the contribution Irish nuns are making to the Roma community in Slovakia.

Ambassador Anne-Marie CallanAmbassador Anne-Marie Callan (Source: Jana Liptáková)

The Slovak Spectator (TSS): Ireland became the first eurozone country to exit an EU-IMF bailout programme in December 2013. What challenges is the Irish economy facing today?
Anne-Marie Callan (AMC):
The Irish economy has been restructured from an overreliance on domestic consumption and residential property construction to a more sustainable model. There has been a concerted focus on competitiveness, boosting productivity, increasing export intensity and the diversity of markets, improving Ireland’s attractiveness as a location for foreign investment and achieving an increase in start-ups and entrepreneurial activity. The year 2014 will be Ireland’s fourth consecutive year of economic growth. Export levels are higher than before the crisis, jobs are being created and unemployment is falling. Since exiting an EU-IMF programme of assistance at the end of 2013, Ireland has made a full return to normal financial market funding, and bond yields have reached historic lows. Businesses, investors and global markets have renewed confidence in our economic future. Forbes magazine ranked Ireland as the best country in the world for business in 2013.

Fiscal policy and financial regulation have been strengthened. Strict legal and constitutional provisions have been put in place including a Fiscal Responsibility Act which establishes an independent Fiscal Advisory Council to assess macroeconomic and budgetary management and compliance with budgetary rules set out in the Act. At EU level, economic and budgetary coordination have been strengthened. More work remains to be done to reduce debt levels. Ireland’s debt-to-GDP ratio is expected to have peaked at 122 percent of GDP in 2013 and to begin declining this year.

Job creation continues to be a key challenge facing the Irish economy. As at February 2014, Ireland’s unemployment rate is high at 11.9 percent, although down from a peak of 15.1 percent in February 2012. A Medium-Term Economic Strategy for 2014-2020 published in December 2013 lays the groundwork to continue the work of re-building the Irish economy to achieve sustainable economic growth, strong public finances and enduring job creation.

TSS: Sustainable agriculture is one of main goals of European and Irish farming. What steps has your country taken in this area?
Ireland enjoys a strong and enduring international reputation as a source of natural, high quality food, drink and ingredients, while it has one of the lowest water stress measurements in the world. Ireland’s food board, Bord Bia, has introduced quality assurance programmes for the full range of primary production sectors in Ireland. Following accreditation by the Carbon Trust for its beef carbon footprint model in 2011, greenhouse gas monitoring has been introduced for all Bord Bia Quality Assured Beef farms. No other country is monitoring its farms on what is in effect a national scale and doing so in a process of measurement, feedback and continuous improvement. In 2012, a similar footprinting methodology was accredited for Irish dairy farming and a similar approach is being progressed for other meats and horticulture. The aim is to have all primary agriculture sectors signed up to sustainability programmes by the end of 2014.

A sustainability development programme, Origin Green, has been developed to cover our entire food and drink industry. At the heart of the sustainability programmes is a sustainability charter that helps Irish food and drink suppliers plan their commitments to sustainability. Sustainability action plans set out the starting point as well as clear short, medium and long-term targets in energy, emissions waste, water, raw materials sourcing as well as social initiatives. Such initiatives can be undertaken in a range of areas including health and nutrition, community and employee wellbeing. Action plans are verified by a world leading inspection, verification, testing and certification company and once approved, participating businesses become members of Origin Green and can use the Origin Green branding. Ireland aims to have 75 percent of its food and drink exports signed up to Origin Green by the end of 2014.

TSS: In 2012, 35,000 more people left Ireland than arrived, according to Eurostat. That is one of the highest net emigration levels in the EU. Why? Has the trend changed?
The latest available data shows that total emigration from Ireland in the 12 months up to April 2013 amounted to 89,000, up 2.2 percent on the previous year. Immigration levels were at 55,900, up 6 percent on the previous year. This means an overall net outward migration of 33,100 in the period. For Irish nationals, the net figure was for outward migration of 35,200, compared with net inward migration of 2,100 among non-Irish nationals.

A recent study by University College Cork shows that emigrants are likely to have a higher standard of education than the population in general. Only 23 percent of those leaving Ireland were unemployed before departing and 47 percent of emigrants were employed in full-time jobs before leaving. Since 2008, more emigrants have left for work-related reasons. The downturn in the construction industry had a particularly acute effect, while manufacturing and retail were affected by a decrease in consumer spending. More than 17 percent of Irish emigrants worked in Ireland in the construction or construction-related industry.

Ireland still has the youngest population in the EU, which may also be a factor in migration. Data is not available to indicate whether Irish emigrants are returning as a result of the improved economy. Emigration does not appear to be affecting skill availability or labour flexibility. Ireland was ranked third in the world for the availability of skilled labour and first in the world for the flexibility and adaptability of the workforce in the IMD World Competitiveness Yearbook 2013.

TSS: Ireland has a large Slovak community. What are the benefits and what are the challenges? Are there any successful business links or cooperation from the Slovaks’ presence in Ireland?
An estimated 20,000 Slovak citizens live in Ireland. The Slovak population has integrated very well into Irish life and Slovaks are very well respected for their strong work ethic. The Slovak population is also very resourceful. Education centres have been established in Dublin and Cork to ensure that Slovak children can learn Slovak subjects.

In addition, Slovak Centre Ireland has been set up by volunteers to provide a community centre for the Slovak community in Ireland.

The strong Slovak presence in Ireland is a benefit to Irish companies as Slovak employees or social contacts in Ireland can assist them to establish local links.

There have also been new businesses established in Ireland by Slovak entrepreneurs including a shop
selling Slovak food and an off-licence selling Slovak beer and other alcohol products.

TSS: Ireland held the EU rotating presidency during the first half of 2013. Any advice for Slovakia when it takes its turn?
I have no doubt that Slovakia will have an excellent presidency. Slovakia has started its presidency planning early, which is very important. Over the past 40 years of membership of the European Union, Ireland has managed seven presidencies of the council. Although the institutions of the union have undergone much change in that time and the EU now embraces 28 member states, our approach has remained essentially the same. As a small member state, we knew that we had limited scope to set the agenda of the union but we also knew we could play a constructive and effective role as an honest broker in seeking consensus around the table and arriving at decisions that were in the interests of Europe as a whole.

TSS: Ireland has a low corporate tax rate, but officials reject the label of tax haven. Now, there are efforts to tighten the rules. Why?
All companies operating in Ireland, domestic businesses and multinationals are taxed at the 12.5 percent rate on the profits generated in Ireland. A higher 25 percent rate applies in respect to investment, rental and other non-trading profits, as well as certain petroleum, mining and land-dealing activities. Some countries have a high headline rate of corporate rates, which is then supplemented by a high number of tax reliefs which reduce the overall rate of tax paid. By contrast, the approach in Ireland is transparent. We have a competitive headline rate of corporation tax, which is applied to a broad base. There are only a small number of corporation tax incentives in Ireland, and they are focused on the creation of employment and on areas of innovation.

The issue of effective tax rates has been the subject of a number of public discussions over the past 12 months. The extremely low effective rate figures that have been quoted in the international media and attributed to Ireland are based on a flawed premise. The figures are estimated by dividing the amount of Irish tax paid by a total profit figure that includes substantial profits made by companies that are not tax residents in Ireland. They are running together the profits earned by group companies in Ireland and in other jurisdictions and incorrectly suggesting that Irish tax does or should apply to both. Ireland cannot tax profits that are properly attributable to other jurisdictions.

The Finance Act 2013 ensured that, in relation to our tax treaty partners, a company cannot be stateless in terms of its place of tax residence. The stateless company change will not by itself bring an end to international tax planning. That requires concerted multilateral action by many countries acting together. The OECD is leading an international initiative, through its Base Erosion and Profit Shifting (BEPS) project, and Ireland is an active participant.

TSS: Does Slovakia remain an interesting destination for Irish companies? In which sectors?
Located in the heart of Europe, Slovakia has a highly productive workforce, a favourable business climate and is a member of the eurozone, all of which make it attractive.
Tourism to Slovakia has great untapped potential. Irish airlines bring passengers here at a relatively low cost. Ryanair has many flights to Bratislava airport and Aer Lingus flies into Vienna. Visitors find Slovaks very welcoming. Slovakia is blessed with beautiful landscapes and scenery including mountains, rivers, lakes and natural parks. Slovakia also has a rich historical heritage and many beautiful castles, buildings and monuments. There are wonderful concert halls and theatres where visitors can benefit from a rich offering of classical music, theatre, opera, ballet and film festivals. There are good hotels and restaurants and a range of tourist attractions including health spas. Tourists can also expect good value for their money.

TSS: Irish nuns support education of Roma children in Spišské Podhradie. Could you tell us more?
The Presentation Sisters opened the Nano Nagle Centre in Spišské Podhradie in November 2004. The centre, named after the founder of the order, serves the local population and offers a range of activities and educational opportunities to both children and adults from Monday to Friday. There is a pre-school or kindergarten for children aged 3 to 7. The children have excellent attendance, are eager to learn and are developing social, verbal and problem-solving skills. The centre provides a homework club for Roma children, supporting retention and progression through the education system. Children benefit from extra tuition opportunities and classes in a range of subjects such as computers, art, music, dance, care of the earth, reading, writing, mathematics and English. Games are organised for older children every afternoon.

TSS: In a few days Ireland will celebrate its national holiday, St Patrick’s Day. What is that about?
St Patrick is the patron saint of Ireland and St Patrick’s Day, March 17, is the National Day. St Patrick is credited with introducing Christianity, banishing snakes from Ireland and using the shamrock as a symbol when preaching in Ireland. The shamrock is an Irish symbol but the harp is the emblem of the state at home and abroad. The Irish abroad play a very important role in maintaining the importance of St Patrick’s Day. It is estimated that as many as 70 million people worldwide can claim Irish descent. As an expression of friendship with Ireland, each year all over the world, iconic buildings are illuminated in green for St Patrick’s Day. They include the Sydney Opera House, the Pyramids in Egypt, the Leaning Tower of Pisa, the Empire State Building in New York, the London Eye and many more. This year the historic Carlton Hotel in Bratislava will go green from dusk until dawn on the eve of St Patrick’s Day and on the day itself. This will be the first time in which a building in Slovakia will go green for St Patrick’s Day.

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