DUBLIN (AP) — Irish Prime Minister Enda Kenny is leading a global St. Patrick’s Day charm offensive that seeks to woo investment from the United States, China and other countries to debt-crippled Ireland.
Kenny arrived Friday in Chicago to begin a five-day U.S. visit that concludes Tuesday with St. Patrick’s Day festivities in the White House. The Washington events are happening three days late because this year the March 17 holiday falls on a weekend.
Kenny has deployed 16 of his government’s ministers to Canada, China, Singapore, Australia, New Zealand, nine European neighbours and several other American cities from Boston to San Francisco.
Photo: Wikimedia Commons
Most of his other 13 ministers are presiding over the dozens of parades, performances and celebrations at home, particularly in Dublin, where a four-day festival started Friday and will peak Saturday when a half-million spectators are expected to line the main Dublin parade route.The focus on boosting Ireland’s image abroad reflects the stark economic challenges facing the one-time Celtic Tiger. Today the Irish are struggling to reverse 14.4 per cent unemployment, slow a renewed wave of emigration and rebuild a battered credit rating that forced the country to negotiate a humiliating 2010 bailout.
“Now is the time to invest in Ireland’s recovery,” Kenny said. “The government will use the unique global opportunity of St. Patrick’s Day to bring that message to all our key global markets and to Ireland’s many friends around the world.”
Ireland’s diplomatic efforts are double the size of St. Patrick’s Day missions last year, when Kenny had just taken power following a landmark election that devastated the previous government. It was blamed for leading Ireland to the brink of bankruptcy by fueling a runaway construction market fed by tax breaks and cheap credit from Ireland’s ill-regulated banks.
When Ireland’s property boom went bust in 2008, the government sought to save those banks from collapse by promising to ensure all their debts against default. That gamble failed to stem a tide of fleeing capital from Ireland and left taxpayers on the hook for repaying potentially €70 billion ($91 billion) in bank losses.
That bill, far too big for Ireland to finance, required a €67.5 billion ($88 billion) credit line with the European Union, European Central Bank and International Monetary Fund. The money is supposed to cover Ireland’s bills until late 2013, by which time Kenny’s government hopes to resume normal borrowing from bond markets.
But economists agree that Ireland’s recovery depends on forces beyond its control, particularly whether the U.S. economy gets rolling again.
More than 600 American multinationals already have made Ireland their European Union base, providing more than 5 per cent of the nation’s jobs and 12 per cent of its entire gross domestic product, or GDP. American companies favour Ireland’s English-speaking work force, participation in the euro common currency, and particularly its low 12.5 per cent rate of tax on corporate profits.
Economists are counting on export-led growth by U.S.-focused multinationals to compensate for the debt crisis overshadowing most, if not all, of Ireland’s 4.5 million people.
The existing bailout deal requires Ireland to slash its deficits to 3 per cent of GDP by 2016. The 2011 deficit stood at 10 per cent. The target this year is to reach 8.6 per cent. But this means yet more spending cuts and tax hikes in a country where hundreds of thousands have lost their jobs, are trapped in negative-equity mortgages and are clamping down on spending.
The government expects to spend more than €55 billion this year but collect just €38 billion in taxes.
But Irish Finance Minister Michael Noonan, attending St. Patrick’s-related events in France, said Friday if U.S. economic growth expands, Ireland’s own economy should “take off like a rocket.”
St. Patrick’s Festival in Dublin, http://bit.ly/zjX52N
Business Insider Emails & Alerts
Site highlights each day to your inbox.