Ireland aims to contribute experience

A RECOVERY country driving recovery in Europe: this is how Brian McElduff, Ambassador of Ireland to Slovakia, envisions the performance of his homeland while it occupies the rotating presidency of the European Union over the next six months. The country, which joined the European Union exactly 40 years ago, is embarking on its seventh EU presidency at a time when the union is facing a severe financial crisis and Ireland itself is feeling some of its harshest effects.

The Slovak Spectator spoke to McElduff about Ireland’s ambitions for its EU presidency, the challenges of double-digit unemployment in Slovakia and Ireland, his homeland’s focus on research and development, as well as about what he calls the well-integrated Irish community in Slovakia.

The Slovak Spectator (TSS): Ireland took over the rotating presidency of the European Union on January 1. What are the contributions that Ireland aspires to make and why do you think Ireland is in a good position to make these contributions or meet the challenges?
Brian McElduff (BM): Our aspirations are very much reflected in our theme “for stability, jobs and growth”. Six months is of course quite a short time and we do inherit much of the agenda from ongoing EU business but we believe we can make a difference in promoting sustainable recovery which will make some impact on Europe’s unacceptably high unemployment rates, especially among the young.
Further developing the already successful single market, promoting intelligent and creative use of Europe’s very considerable resources and developing our international relations, including in the area of trade, will all form part of our strategy. Reaching agreement on the EU’s multiannual financial framework will be crucial to ensuring that the EU’s efforts to promote growth are successful.

This is our seventh presidency of the EU Council and it coincides with the 40th anniversary of our accession to the then EEC, so we have considerable experience in the role. Of course, the EU has been facing a very severe financial crisis in recent years and Ireland was one of the hardest-hit countries. But resolute decisions taken by us nationally and by the EU mean that we see our 2013 EU presidency as that of a recovery country driving recovery in Europe. We will bring to our six months in office our national experience in securing fiscal and economic stability aimed at restoring jobs and strengthening social cohesion.

TSS: Will the fact that Ireland is one of the PIIGS (Portugal, Italy, Ireland, Greece, and Spain) nations affect its presidency and if so, how?
BM: Well we would not use the term PIIGS. Apart from its possibly offensive associations, it provides a misleading impression. There are of course links and parallels between the eurozone countries, which have been badly hit by the financial crisis, but each case is very different. In Ireland’s case, the fact that we remain in a bailout will not affect the conduct of our presidency.

We pride ourselves on our professionalism and can point to considerable achievements during our past periods in the chairmanship. Of course we are keen to make progress on the banking union and the ESM and such structures and mechanisms will be to our national benefit – but they will benefit the entire EU by restoring stability to the eurozone. Most of the major decisions are already behind us, including the decision last June to break the link between bank and sovereign debt, and our aim is to make the maximum progress in giving effect to these common decisions. We believe, and the markets agree with us, that the worst of the eurozone crisis is over.

In the case of Ireland, our economy is growing and we have met and indeed surpassed the reform and budgetary targets set by the Troika [IMF, EC and ECB]. Our aim is to exit the bailout later this year but it is of crucial importance that the issue of our legacy banking debt, which placed an enormous and disproportionate burden on the Irish exchequer, be re-examined.

TSS: According to your official website, R&D in Ireland has expanded dramatically in recent years. What has been the impetus behind this development and what are the impacts of this change so far?
BM: The main impetus behind our expanding R&D budget is the solid evidence that it is effective in promoting economic growth. More Irish companies are engaging in research and development than ever before – even in 2009, the worst year of recession in our history, investment in R&D rose by 2 percent. Our generous official support for R&D has long been acknowledged by the research community, but much of the work had a limited economic impact. The focus has shifted in recent years towards applied rather than pure research which must have potential to be used in industry or in the community. This is now the predominant context in which researchers have to make a case for funding.

TSS: This year Ireland will mark the 40th anniversary of its EU membership. How does the population view EU membership today? Is there any opposition or are there negative attitudes towards EU membership in your country?
BM: Despite setbacks, Ireland remains a fundamentally pro-EU country. The EU over the last 40 years has provided us with enormous economic benefits, but has also given our small country a valuable voice. We are so used to dealing with our EU partners that we can forget how dramatic the experience has been, but the EU has been a major force in the transformation of Ireland since the 1970s. That said, there will always be differences of opinion on the EU including some quite robust opposition to the idea of European integration. We believe in having an open debate on all issues helped by a very free media and a strong civil society. The experience of having referenda on successive EU treaties has entailed lengthy and occasionally fraught public debate. But clear communication is essential, particularly as the workings of the EU are not easy to understand and there are many misconceptions. We also have to deal with our openness towards the London media, parts of which are strongly eurosceptic. But the passing of our referendum on the Fiscal Treaty last year, in very challenging circumstances, does indicate that a majority of people retain faith in the EU.

TSS: Ireland has been an attractive destination for Slovak migrants in recent years. Has the economic crisis changed this trend and if so how? Are Irish investors in Slovakia taking advantage of the significant pool of Slovaks who have returned to the country after the economic downturn hit Ireland?
BM: The economic crisis and subsequent high level of unemployment has certainly impacted immigration but there are still about 20,000 Slovaks living and working in Ireland and there is now a considerable pool of people in Slovakia who have worked in Ireland and are familiar with how we do business. Quite a lot of Irish companies established their sales offices in Slovakia because they had a Slovak employee who could enable them to establish a foothold here. This is an area with quite a lot of remaining potential and I believe it augurs well for building future business links.

TSS: Ireland and Slovakia are among those EU countries with double-digit unemployment rates. How has Ireland addressed the issue of high unemployment and what are the main challenges facing the Irish labour market?
BM: The impact of the financial crisis, a fall in domestic demand and in particular the severe slow-down in the construction sector have all contributed to a serious increase in unemployment in Ireland. Given that, like Slovakia, we are a highly globalised economy, we have been badly affected by the downturn in our main markets. There are no short-term solutions but it has been vitally important to us (as it is to the EU as a whole) that we regain competitiveness. This is rather like trying to get fit after a period of inactivity – it is a slow process but there are no short cuts. Wage rates and costs for business in Ireland have fallen and we have regained a lot of our lost competitiveness, which is shown by the slow but sustained pick-up in our economy against a challenging international environment.

The EU also plays a crucial role in promoting the creation of sustainable jobs. Improving the function of the single market and developing the digital market in particular is key to making the EU more competitive. There are also very practical measures such as removing the obstacles that discourage the free movement of people within the union by, e.g., ensuring the rights of migrant workers and facilitating the mutual recognition of professional qualifications. We are particularly concerned with providing opportunities for young people to avoid the creation of a ‘lost generation’.

TSS: Does Slovakia remain an interesting destination for Irish companies? How do Irish businesses view the Slovak business environment and which sectors are of interest to potential investors?
BM: Ireland and Slovakia are countries of similar size, with very open economies and a high share of foreign direct investment in GDP, and of course both countries are members of the eurozone. This is an important framework for business relationships. A large proportion of Irish exports to Slovakia are pharmaceuticals or software produced in Ireland, while Slovak exports to Ireland are dominated by electronics and cars. However, more and more Irish small and medium-sized companies are present in Slovakia and use your country as a centre for their business activities in the central European region. Having the euro as your currency as well as enjoying relatively lower costs of doing business than elsewhere in the region certainly adds to the attraction of Slovakia.

As mentioned earlier, a substantial number of mostly young Slovaks have worked or are still working in Ireland. This mobile and usually well-educated group of people represents quite a unique link between Ireland and Slovakia and provides a very solid basis for increasing business links.

TSS: How large is the Irish community in Slovakia? Do you feel that Irish and Slovaks know enough about each other? Has the potential for tourism between the countries been fully explored?
BM: The Irish community in Slovakia is not enormous – perhaps 100 or so, but it is very well integrated. Many of our citizens are long-termers and are married to Slovaks or have longer-term work commitments here. We also have a number of students, especially in Košice. Each country has become a great deal more familiar to the other, especially since Slovak EU accession during our last EU presidency in 2004. The large number of Slovaks who have worked in Ireland and the substantial number of Irish visitors to Slovakia have transformed relations – these personal links and experiences are deeply important. The existence of a direct flight link to Dublin has been a great boost to links and has certainly increased the tourist traffic. Most Irish tourists only visit Bratislava and do not spend a lot of time here and in that respect they may be rather typical. But I am sure that increasing numbers will also begin to explore further afield. The fact that Košice will be a European Capital of Culture will hopefully help to boost the profile of the eastern part of the country. I am sure that Slovaks will also increasingly regard Ireland as a tourist destination, especially now that our costs have decreased – our traditional culture and magnificent coastline are particular attractions.

TSS: What aspects of Irish culture do you find appeal most to Slovaks?
BM: Irish culture has a number of particular strengths but I would specifically identify folk music and literature as having the greatest international profile. Slovakia, in common with the rest of central Europe, has an excellent classical tradition but also enjoys one of the best folk music traditions in Europe and this is something which definitely unites us. Ireland also has an extremely strong literature and this is also much appreciated by Slovak readers. We have provided support for the translation of our writers into Slovak – my good friend Igor Navrátil has just completed his latest translation of the novel “Brooklyn” by the Irish writer Colm Tóibín and I look forward to seeing it in the Bratislava bookshops.