Kenny expects further concessions on legacy debt

Speaking at Davos, Taoiseach heralds new spirit of optimism about country’s prospects

Taoiseach Enda Kenny said he would balance his positive message to delegates with the expectation that Ireland expects further concessions from European partners on its legacy debt burden. Photograph: Eric Luke / THE IRISH TIMES

Taoiseach Enda Kenny said he would balance his positive message to delegates with the expectation that Ireland expects further concessions from European partners on its legacy debt burden. Photograph: Eric Luke / THE IRISH TIMES

Thu, Jan 23, 2014, 15:52

Taoiseach Enda Kenny has welcomed a positive interest in Ireland’s economic outlook at the World Economic Forum (WEF) in Davos.

Mr Kenny, joined by minister for finance Michael Noonan, said he would balance his positive message to delegates with the expectation that Ireland expects further concessions from European partners on its legacy debt burden after the recent crisis.

“When we came here three years ago there was a spirit of disillusion and despair ... this year it is a very different situation,” said Mr Kenny. “The interest expressed in the Irish story is palpable (and) two things stand out: our capacity to exit the bailout and the rating upgrade by Moody’s to investment status. These are important signals.”

Mr Kenny said that, together with Mr Noonan, he had been careful to insist there was “no room for any complacency in the journey we have yet to travel”.

Mr Noonan said his focus was underlining Ireland’s attractiveness as an investment location but would raise the debt issue where appropriate, as he did at a lunch last week in Dublin with EU ambassadors.

“They all report back and the message was given loud and clear that we think there is unfinished business among the commitments made,” said Mr Noonan.

The Taoiseach reiterated that a June 2012 agreement by EU leaders to break the link between bank and sovereign debt still stands and that investors in Davos “like to see decisions made being followed through”.

This evening Mr Kenny participates in a public panel on European competitiveness alongside European Commision president Jose Manuel Barosso and, later, an IDA dinner for existing and prospective investors.

During the day, the Taoiseach held meetings with leading executives including Citi Group European cheif executive James Cowles and Facebook chief operating officer Sheryl Sandberg.

Mr Kenny said Ms Sandberg was very happy with Irish regulation of Facebook’s Dublin operations and the taoiseach confirmed he would open the company’s new facilities in the capital later this year.

He added they discussed Ireland’s engagement with ongoing international talks on tax affairs at the Organisation for Economic Co-operation and Development (OECD). Amid these talks, international observers have criticised as unsustainable Irish legal tax avoidance of international tax affairs of Facebook and other multinationals based in Dublin.

“I confirmed to Sheryl Sandberg that Irish corporate tax rate will not be moving up or moving down, investors like certainty in this regard,” he said. Agreement on new international tax standards was “not down to Ireland alone, (but) our 12.5 per cent rate is a national competence and is not moving”.

On another Davos focal point, youth unemployment, Mr Kenny said he thought European leaders already had the tools at their disposal to tackle this issue.

“We have to have conviction, courage and clarity to make a decisive decision that people will follow,” he said, predicting it would be a major issue in May’s European elections.

As well as meetings with business leaders, Mr Kenny had talks on the sidelines of the WEF with his Dutch and Finnish counterparts, Mark Rutte and Jyrki Katainen.