By Dan Keeler
When Ireland’s voters unceremoniously booted out the Fianna Fail-led government in early March election, they were hoping that new leadership would give the country a fresh start.
IDA’s O’Leary: Confident
Humbled by the near-meltdown of the country’s economy during the global financial crisis and battered by the sovereign debt debacle of the past 18 months, Ireland has suffered more than most countries recently.
The incoming government, a coalition formed by Fine Gael and the Labour Party,faces an uphill struggle. In a nation that was renowned for its labor shortages during the boom, unemployment has now climbed to over 14% and the domestic economy, not surprisingly, is in a slump. As a precondition for receiving an €85 billion bailout deal from the European Union, Ireland’s previous government agreed to a harsh austerity plan that will see services cut and taxes raised on a population that is already suffering a severe post-boom hangover.
As well as establishing programs aimed at reducing unemployment and enhancing the domestic economy, he incoming government is keen to attract foreign firms to invest in Ireland in order to boost its exports. Barry O’Leary, chief executive officer of Ireland’s Investment And Development Agency, says the consequences of the recent crises have helped put Ireland in a position to do just that: “Since the crisis,Ireland has effectively repriced itself, ”he says. “Wages, real estate and energy are all significantly cheaper than they were during the boom. ”Ireland also offers companies a range of incentives to set up operations there and has also set its maximum corporate tax rate at 12.5%—a level that some other EU member states complain gives Ireland an unfair competitive advantage.
According to O’Leary, some sizable companies are already taking the bait. “Foreign direct investment into Ireland this year has already reached about $3.5 billion, ”he notes. “It’s running at the highest level since 2002. ”He points to recent substantial commitments by Intel, Google and biotech giant Amgen as evidence that the global business community believes in the country’s potential. “It gives you a good degree of confidence when you get [some of the world’s biggest companies] making investments in Ireland, ”he says.