|Ambassador Eugene Huthinson|
Courtesy of the Irish Embassy in Poland
Ewa Boniecka: Having been badly affected by a banking crisis which led to an economic crisis, Ireland’s strategy for economic recovery seems to be working. Why do you think that is?
Eugene Hutchinson: Ireland posted modest growth in 2011 and 2012 and we expect 1.5 percent GDP growth this year. The export sector is leading the recovery. Exports are now exceeding pre-crisis levels and reflect the very significant improvement in our competitiveness.
Foreign direct investment is strong, the difficult international economic environment notwithstanding. We are world's highest-ranking economy in terms of the availability of skilled workforce. With one of the most open economies in the world, Ireland is, in a real sense, “trading” its way to recovery – the only sustainable way in the long term. Exports are forecast to increase by some 3.3 percent this year.
The strong export performance has been producing an increasing surplus in the balance of payments since 2010. However, domestic demand remains subdued, household savings are high and, while this has begun to ease somewhat, unemployment is stubbornly high at about 14 percent.
What is the outlook for the future then?
Our medium-term growth potential is strong. We are fortunate in having a flexible, adaptable economy, high levels of education and an internationally recognized pro-business environment. Our GDP growth is forecast at 2.7 percent for 2014 and 2015. With this, as well as the further consolidation of public finances, our budget deficit should be reduced to below 3 percent of GDP by 2015.
So far, Ireland has met and exceeded all of the targets in our EU/IMF assistance program. We will continue to do so. Our banking system is being downsized and repaired, sustainability restored to public finances and we are concentrating on stimulating economic growth. But many risks and uncertainties remain, such as the economic situation in our export markets.
This year, we intend to be the first EU/IMF program country in the euro zone to make a sustained return to the sovereign bond markets, and we are working with our partners to make sure this difficult task is achieved.
Needless to say, this hasn’t been an easy process for Ireland. It has required us to make difficult choices, and asked much of the Irish people. Yet we have also been able to maintain social cohesion and solidarity throughout this difficult period.
Ireland took over the rotating presidency of the EU in January. This is a familiar role for Ireland, isn’t it?
Yes, this is Ireland’s seventh presidency. The first was in 1975 – a few months after I joined our foreign ministry. Our 1990 presidency managed Europe’s common approach to the historic unification of Germany. In 2004, during Ireland’s most recent EU presidency, we welcomed Poland and nine other member states into the Union. And this year we celebrate the 40th anniversary of Ireland’s membership of what is now the European Union.
While we are, in a sense, presidency veterans, in another way we are newcomers as this will be our first EU presidency under the revised rules and procedures of the Treaty of Lisbon. In that sense, Poland is ahead of us; Poland has already held presidency under the new Lisbon Treaty arrangements.
When we were preparing for our presidency, the Polish Ministry of Foreign Affairs shared with our planners its experiences from Poland’s own successful tenure. So we hope that we can make progress, make a difference. But the presidency, Irish or otherwise, cannot do it alone. The cooperation of all member states is required to succeed. We need to go forward together.
What are your country’s priorities for the EU presidency?
Of course, every presidency has an array of challenges to confront. Some of these are ongoing, such as the economic crisis which has dominated the work of all EU presidencies in recent years. Its aftershocks, as well as the Union’s response to them, will be very evident during Ireland’s presidency.
As we see it, 2013 ushers in a new phase in the EU’s drive for recovery. So Ireland’s presidency is about making a contribution to securing stability and ensuring that this will bring jobs and growth. Hence the theme of our presidency is “Stability, Jobs and Growth.”
We have all been affected by a crisis that revealed the weakness in the monetary and fiscal framework of the European Union. The economic and social effects of the crisis have led to unacceptably high levels of unemployment and hardship across the EU, not least in Ireland.
But we see opportunities as well as challenges at this stage. We feel that the EU is entering the next phase of its recovery. The values and strengths underpinning the European project ensure that the European method of decision-making can indeed produce the necessary changes.
So, late last year, when choosing our priorities for the current agenda of legislation and initiatives, we looked closely across the wide spectrum of the EU’s business and asked a very simple question, “Does this make a difference?”
The pressing priority for the Union is economic growth, to give those affected by devastating job losses a chance. So the first step is to build lasting stability, starting with advancing the renewal of economic governance in Europe.
We feel that a key area for progress will be in banking union. Fixing the European banking system will make a real difference. We also aim to improve the Union’s economic coordination. We need to optimize the prospects for job-friendly growth and contribute to tackling youth unemployment. In a nutshell, our priorities are stability, jobs and growth.
Can you be more specific?
Let me explain our approach on jobs. We applied what we called a “jobs test” across all policy areas when picking our [EU] presidency’s priorities. With youth joblessness at more than 25 percent in 13 member states, including Ireland, we want to spare no effort in tackling this scourge. We wish to see member states policies move towards programs of traineeships, further education and other opportunities.
The “Compact for Growth and Jobs” is a key element of the Irish presidency and the need to improve the implementation of the Single Market priorities is clear. This has been a great European success story, but a story which is yet unfinished. We want to unlock more of the Single Market’s potential, thus contributing to job creation and to the viability of Small and Medium Enterprises.
Lower transaction costs, for example, will increase profits and thus employment in these enterprises. There are nearly 21 million SMEs in the EU, employing more than 85 million people. A lot can be done to boost employment in other areas, for example through the Erasmus for All framework.
Our presidency is pushing ahead with legislative proposals to promote Europe’s Digital Economy, to benefit both business and consumers. This is a complex, multifaceted area: EU foreign ministers will work on cyber security, competitiveness ministers on copyright aspects while EU justice ministers on data protection.
Has the enlargement process lost its momentum?
We are also working with renewed purpose on further enlargement of the Union, to advance the process for all of the candidates and prospective candidates. We expect to see Croatia join the EU at the beginning of July 2013, want to advance the negotiations with Iceland and Montenegro, and will also restore the momentum in the accession process with Turkey. Each country is at a different stage but we hope to open negotiation chapters with all of them.
The European Council Conclusions agreed in December to allow for the possibility of important decisions on the former Yugoslav Republic of Macedonia, Serbia, Albania, and Kosovo during Ireland’s term. We stand ready to progress with them during our presidency, should the Council so decide.
The EU budget for 2014-2020 was agreed upon after long and difficult negotiations. How does Ireland see it?
The Multiannual Financial Framework (MFF) is a key issue. The funding for policies and programs such as the common agricultural policy and cohesion policy will have a major impact on our future. We want to ensure that future financing supports sustainable growth, innovation and key infrastructural projects, while promoting employment and social inclusion.
The presidency is supporting [European Council President Herman] Van Rompuy to the fullest. Ireland will seek to secure the consent of the European Parliament for the adoption of the budget. We will lead the negotiations with the European Parliament on each of the nearly 70 legislative measures necessary to give practical effect to the agreed budget.
Given its preoccupation with handling the economic crisis, how do you see Europe’s relations with the world?
Of course, Europe’s recovery cannot happen in isolation. Europe needs to look outside its borders and engage with its global partners. During its presidency, Ireland will fully support Catherine Ashton, the Union’s High Representative for Foreign and Security Policy and the European External Action Service in strengthening the effectiveness of the EU’s external policy and responding to challenges in foreign policy and ensuring security.
Values of peace, democracy and human rights are central to Ireland’s foreign policy. They inform our contributions to the EU’s Common Foreign Security Policy and Common Security and Defense Policy. Human rights issues, global disarmament and non-proliferation treaties, conflict resolution and effective development assistance have a particular resonance for us. As well as furthering enlargement, we will encourage the development of democratic societies outside of the Union’s east and south border, including the Eastern Partnership dimension.
Trade is a major driver of growth. Thirty million jobs, about 10 percent of the EU’s workforce, depend on exports. A strong package of trade agreements could add 2 percent to EU growth rates. We hope to build momentum in the negotiations between the EU and third countries so that our exporters can have better access and greater opportunities. We would like to conclude trade agreements with Canada and Singapore. Our presidency also wants to advance free trade negotiations with Japan, India and other strategic partners, and also the EU-China relationship. We will place a special focus on the EU-US trade relationship.
You mention EU-US links. Ireland has many very close ties with the United States. The era of massive Irish emigration to the US is over. What are the main factors in the Irish-US relationship today and how do you see the EU-US trade relations now?
This is a vast question. But, in brief, Ireland has traditionally enjoyed a close relationship with the United States. We have close ties of history, family, culture and, more recently, vital economic and commercial links.
About 40 million Americans claim Irish descent. The US plays an essential role in Ireland’s economic development. American companies have invested about $190 billion in Ireland and are making a huge contribution to our economic recovery. The US has also made a major contribution to peace in Northern Ireland.
On the basis of this relationship, we feel that we are well-positioned to contribute to deepening the relationship between the EU and US. Two of the world’s largest trading blocs, they already have very strong trading and investment ties. The successful future conclusion of a Free Trade Agreement with the US would have a significant and positive impact, resulting in new markets for European exporters with knock-on positive effects on job creation, a key objective for us. The Irish Presidency will work towards a new generation Trade and Investment Agreement between the EU and the US.
How do you assess the current Polish-Irish relationship, particularly in the context of this difficult period in the EU’s development?
It is a privilege for me to be Ambassador to a country with which we enjoy such close and friendly relations. Ours is, by and large, a new relationship but it is a strong one which I am sure will last. Poland’s accession to the EU in 2004 was a milestone. Tens of thousands of young, dynamic and entrepreneurial Poles have come to work in Ireland over the last decade. Perhaps as many as 150,000 currently live in Ireland – which explains why Polish is now the second-most spoken language there.
The Polish community is greatly respected in Irish society. We appreciate their contribution to the country’s social and economic development. Satisfaction surveys carried out among Poles living abroad consistently produce top marks from the Polish community in Ireland. I cannot stress enough the importance of these “people-to-people” contacts in the deepening of our bilateral relations. There are direct flights to Ireland from as many as 12 Polish destinations.
The Irish-Polish economic and commercial relationship is substantial and mutually beneficial. Bilateral trade in goods and services is valued at close to €2 billion annually. Irish exports to Poland have been growing steadily in recent years, notwithstanding the economic turmoil in Europe. Our exports increased by about 15 percent last year, to some €700 million.
Poland is the 8th largest market for indigenous Irish companies. We estimate Irish direct investment in Poland at €1.5 billion and Irish companies employ some 4,500 people here. Top class Irish civil engineering and construction companies have made a significant contribution to the development of Poland’s motorways network.
Our links at the political level are excellent. A number of Irish ministers came to Warsaw for consultations in the run-up to our presidency. A wide range of Polish ministers are traveling to Ireland now, during our period in the chair. These contacts enable us to share our ideas on the common challenges which confront the EU. This is valuable for us not only during our presidency but also nurtures our bilateral relations.
Let’s not forget the vibrant Irish community here in Poland, which includes many Irish businesspeople and students. The local Gaelic Athletic football club, “Cumann Warszawa,” now also has many Polish players and supporters. The Poznan-based Irish Cultural Foundation stages excellent events throughout Poland. And the St. Patrick’s Foundation organizes the premier Irish-Polish social event of the year, the St. Patrick’s Charity Ball, in mid-March to fundraise for some very worthy local projects – a “hot ticket” event!
What’s your opinion on PM Cameron’s recent speech on the UK’s relationship with the EU?
This, of course, is not an agenda item for the presidency: there is no British proposal or request. PM Cameron’s speech set out a strong case for the importance of the UK’s continuing and active membership of the EU. This is welcome. Like all Member States, the UK gains from its membership of the Union: it also makes a valued contribution. The EU is stronger for having it on board.
As we see it, the key challenge of making sure the Union is properly equipped to meet future challenges is a shared interest across the EU. Much work has already been done collectively in light of the unprecedented economic challenges we have faced.
Clearly, debate will continue – both in the UK and at the European level – on the best approach to take. If individual Member States want to bring their thoughts and ideas to the table, so be it. We do not wish to interfere in the UK’s internal debate, but we would hope to see the UK remain a strong partner in the EU.
However all of this should not distract us from what needs to be done now. During our presidency, we are working to ensure that stability, jobs and growth are right at the top of the agenda. This is where our energies must go: single market, trade, banking union, employment, digital opportunities. Making use of these levers, the Union can and will make a difference.
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