THE FACT OF THE MATTER
BY PAUL HOPKINS
It will likely be into the early days of the new year before a coalition Government is formed. And it will be roughly a repeat of last time around, Fianna Fáil and Fine Gael, but with the Labour Party or, perhaps, some Independents – the Greens having been virtually annihilated. The left-leaning, lesser-populated parties are too fragmented in their policies to agree on any cohesive opposition with Sinn Fein, somewhat down in approval. And, TV debate performances or no, people had largely made their minds up, given the predictable outcomes at the ballot box.
Hats off, though, to the Social Democrats.
It is the best of times, it is the worst of times. Never have the next government had so much money to spend, yet the issues facing us continue to plague us – health, housing, childcare, law and order, migration, and access for special needs. While all parties canvassing promised to throw everything, bar the kitchen sink, at addressing these urgent needs, in most cases their figures don’t always add up and likely would fail any realistic application.
As I see it, the electorate have agreed to allow Fianna Fáil and Fine Gael get on with it and this time around, given the electorate outcry and what was being said on the doorsteps, they will have to simply pull up their socks on the apathy, or lack of application, to addressing the aforementioned issues.
Yet, watching what was being said in the lead-up to November 29, it seemed there was little being taken into account about our financial prowess and the simple act of what could upturn it all.
The Trump factor. And the looming date of January 20 when Donald Trump is sworn in as the next president of the US.
The financial future of Ireland is in his hands and he has already got his eye on the €35 billion Irish trade surplus with the US which has everything to do with the low corporation tax which US companies love. Pharmaceuticals and chemicals, for instance, are made in vast amounts by US subsidiaries and exported back home to the US.
Being a member of the EU may bring politicians some solace but Brussels’ calls for harmonisation of taxes could, with Trump tariffs, possibly bankrupt the country. Trump is no push-over and this Government is leaving the next Government – which will probably be, as I say, the same mix – a daunting legacy.
On January 20, the US-Irish ‘special relationship’ will, in effect, cease to be. Donald Trump will not be playing the traditional role of previous US presidents in bolstering the Irish economy. And his promises of trade tariffs will bite deep into our economy and affect how the next government can financially address our health and housing issues and all the rest of what needs to be done.
Meanwhile, the American Chamber of Commerce (AmCham) has published its latest quarterly survey on members’ current views on Ireland as a destination for growth and further investment. The vast majority of members are optimistic about Ireland’s economic potential with 97% responding that Ireland is competitive when compared to other advanced global economies. Some 52% say the main reason for this is a highly educated and s≠killed talent pool.
Some nine in 10 respondents say their corporate headquarters has a positive view of Ireland as an investment or growth location. However, 40% say housing is the most important challenge for Ireland to overcome for their company to invest and expand here. This is down from 49% in AmCham’s March survey. Some 19% say cost competitiveness is the most important challenge, while 12% see skills shortage as the No.1 challenge. These figures have increased from 10% and 8% respectively since March last. In relation to recruitment, the majority (56%) say they expect the number of employees in their Irish operations to increase in the next 12 months. Furthermore, 41% say they expect to maintain current employment numbers, up from 35% in March. The areas of infrastructure development that require the most urgent investment from Government are housing (59%), transport (14%) and energy (14%).
On a final note, incoming European commissioners for trade and agriculture in Brussels have been put on notice that key member states are out to block the ratification of the long-delayed EU-Mercosur trade agreement which would open EU markets to greater competition from Brazil, Argentina, Bolivia, Paraguay and Uruguay. Ireland’s farm groups say the deal as it stands will allow large imports of foods produced under far more lax regulations.
Our future is not necessarily guaranteed…
