Business groups lend support to Yes vote

The business community backs the Lisbon Treaty because it will boost exports and encourage foreign investment, writes Barry O'Halloran

APART FROM those calling for a No vote, no one thus far seems to be getting terribly worked up about next month's referendum on the Lisbon Treaty on EU reform.

But it appears the Yes campaign is gathering some momentum. Today, the Irish Alliance for Europe, led by politicians like former Labour leader Ruairí Quinn and one-time taoiseach, Garrett FitzGerald, will launch its bid for the public's hearts and minds in Dublin's Alexander Hotel. Retired politicians are not the alliance's only backers. Business is one of its "pillars" and, by and large, this group is squarely behind calls for a Yes vote in the referendum on June 12th.

Last night, Bank of Ireland chief executive Brian Goggin told the Michael Smurfit Graduate Business School annual dinner that membership of the EU is good for Ireland and good for business.

"This referendum is about two things. It is about the content of the treaty itself and it is also about the broader question of whether we want to belong to the European Union or not, and what type of members we want to be," he told the gathering.

He also dismissed claims by the other side that rejecting the treaty would not be a vote against the EU as completely wrong, and said that a No vote would in fact jeopardise the Republic's "hard-won" position in the European Union.

Mr Goggin was a bit short on specifics, but most of the leading business organisations are not. Patrick King, research and communications director with Dublin Chamber of Commerce, says that the treaty is necessary to make institutions, designed for a union of six states, more efficient and suited to one comprised of 27.

For instance, he points out that at 27, the number of commissioners outnumbers that of the directorates. This makes about as much sense as having more Ministers in the Cabinet than Government departments, he says.

He adds that the fact that not every member state will have a commissioner all the time is irrelevant, as all will be equally represented on the commission over a 15-year period.

Mr King points out that the council of ministers, made up of heads of state, will drive the policy making, and this will operate by consensus. Along with that, the European Council, made up of ministers from member states, will be the key decision-making body, along with the parliament.

A big concern is the voting system within this particular council. Ibec director Brendan Butler explains that this will require a majority representing 65 per cent of the EU's population and the support of 15 of the 27 states.

Opponents argue that this effectively reduces the power of smaller states like our own. However, Mr Butler stresses that both the 15 states and the 65 per cent majority are required for a vote on any proposal to succeed, a sort of double lock. "That gives smaller states more power, not less," he says.

Under a system introduced in the Nice Treaty, Ireland has seven votes out of 345. Both Mr Butler and Mr King are keen to point out that decisions will be made by consensus wherever possible, so votes should be the exception rather than the rule. "We should not be particularly concerned about it," Mr King says. Chambers Ireland, which represents the State's 66 chambers of commerce, has yet to set out its position, as all its affiliates have to decide for themselves first, and it will follow their lead. However, those that have debated the issue have so far come out in Lisbon's favour.

Are there actual benefits for business? Mr Butler says that there is as the treaty will strengthen the single market, one of the biggest customers for the goods and services that the Republic sells abroad.

"The value of our exports to the EU has doubled from €44 billion to €88 billion over the last 10 years," he says.

The business community generally agrees that the single market and the euro zone are key attractions in drawing vital mobile investment to the Republic, particularly from the US, which favours the country because it is the only English-speaking state in the euro zone.

Paul Rellis, chief executive of Microsoft Ireland and president of the American Chamber of Commerce in Ireland, which represents a lot of multinational investors, says we should not "down play the role that it plays in bringing in investment. Ireland can continue to play its leading role in Europe rather than becoming in some way detached," he adds.

But our 12.5 per cent corporation tax rate also plays a big part in bringing investors here, so does Lisbon pose a threat to what is seen as a key attraction? The answer is a resounding no, to tax harmonisation that is. Brendan Butler and Patrick King point out that we have a veto and we will continue to decide on our own tax laws.

What if, despite the pleas of our business groups, we go ahead and vote No? Mr King and Mr Butler say the effect will be to halt the whole process across the 27 EU states, leaving them in a limbo, and possibly sparking a political crisis. The treaty requires 27 states to ratify it, and our constitution requires a referendum before the State can ratify such a document, thus without our support, the whole thing could be derailed, they say.

From the Republic's point of view, business groups say it will send out the wrong signal to Brussels and to the rest of the world.

"We punch way above our weight in the EU," Mr Butler says. "We get a lot more of what we want than other small countries, our influence will be severely damaged.

"It would also send a worrying signal to American boardrooms if it's seen that Ireland is not fully in line with the rest of Europe."

Mr Rellis agrees that this would be the ultimate effect. "You would not see an overnight impact, it would take a few years, but from an international point of view, it would be a very negative signal to send out about where Ireland stands," he warns.

"A lot of eastern European countries are adopting English more and more and are starting to challenge Ireland in skills and education, we have to remain competitive with them."