Harney ready to move on, but not to Brussels

After 7 years at Enterprise, Trade and Employment, the Minister isjob-hunting, writes Una McCaffrey

Something is stirring in the offices of the Tánaiste, Ms Harney, at the top of Dublin's Kildare Street. There is a sense of impatience in the air of the wood-panelled offices, with the buzz that has surrounded the place since she took up her tenure as Minister for Enterprise, Trade and Employment almost seven years ago, taking on a new face.

Day-to-day business is no longer about shaking up the old system - it is about completing a job that began longer ago than Ms Harney herself may care to remember.

"I never thought I'd be here for seven years," she says, reflecting on the various ministerial achievements she has notched up since taking up her position.

The time has come, she admits, to move on and face new challenges in a different area. And just so that everybody is clear, this new role will not see the Tánaiste swapping the cabinet table for a larger desk at the European Commission in Brussels.

"I'm not going to Brussels, I can assure you of that," she says, expressing some amusement at the number of well-wishers who have stopped to congratulate her in recent weeks on what they genuinely believed was about to be her next move.

Not so, she protests, the Irish cabinet is where she will remain, at least for now.

The actual cabinet position she will hold after a probable reshuffle next summer is where the mystery lies, however. She concedes that not many other ministries are as meaty as the one she has held so tightly for most of the last decade but shies away from identifying where she wants to go. Presumably the Minister in situ needs to be told first.

Ms Harney suggests that her term as Minister for Enterprise, Trade and Employment can effectively be split into two parts. For the first few years, she concentrated in dragging the Republic's corporate regulatory and enforcement structure into the modern age, and, more recently, she has looked more at developments in science and research.

The latest bee to enter her bonnet harks back to the early days, when the stream of investigations she launched into questionable corporate behaviour briefly became torrential.

In conjunction with her fellow cabinet members, she wants to use the Republic's presidency of the European Union to help bridge the yawning gap that the war in Iraq has forged in Europe/US relations.

She is hoping to encourage greater convergence between the regulatory and legal systems that govern how business is done in the two territories.

"There is so much to gain," she says, pointing to the possibility of moving closer in areas such as corporate governance, accounting standards and environmental law.

"We will try to rebuild the relationship that was damaged with Iraq," she says, highlighting the implementation of the Kyoto Treaty as a matter on which convergence would be in the interests of all.

"In this kind of area, Europe and America need to work together," she says, suggesting that both sides need to move, rather than one simply fitting in with the other.

Any positive development on this front would represent a fitting end to Ms Harney's term in office, with overhauling regulatory and enforcement structures apparently within her nature.

She has launched no fewer than 16 investigations into company law since taking up her position, as well as beefing up the Competition Authority and establishing the Personal Injuries Assessment Board and the Office of the Director of Corporate Enforcement.

"There's an awful lot of catching up to do," she says, pointing, in particular, to competition law. Her success in this area will, she notes, be well-tested next year when the Organisation for Economic Co-operation and Development, at the invitation of the National Competitiveness Council, compares Irish competition law against that of a large group of its peers.

She rejects the suggestions of some that the Competition Authority has failed to live up to its initial promise by causing limited ripples on the enforcement side.

"It only got enhanced powers in the last year. There's an enormous amount of work underway," she says, adding that "at the end of the day, you have to be able to stand up the cases in court".

Reflecting on her role within investigations such as the Ansbacher scandal, Ms Harney acknowledges that it may not have been "suitable" for a politician to lead such public efforts to clean up corporate Ireland. At the time, however, there was little choice, with the office of the Director of Corporate Enforcement not established in time to deal with all the issues.

"Because the law was ignored, an awful lot of things came together," she says. "I don't believe we'll ever see the need for that level of enquiry again".

Moving back to the present day, she says the Republic's full policy on Kyoto and related environmental policy will emerge in the new year. She is aware of business concerns in this regard, having given fair hearing to the many lobby groups worried about an Irish carbon tax being levied in the future.

While this now looks to be an inevitability, Ms Harney says the Government has taken a "holistic" view on the matter and is conscious that the Republic could lose competitiveness because of the smallest additional taxation measure.

"You need to look at whole packages," she says, noting that a number of locations around the world levy absolutely no tax on corporate profits.

The Government is aware, she says, of how fast-moving, innovative states could easily bypass the Republic in competitiveness terms if it took its eye off the ball.

Focusing the mind in this regard is the accession of 10 new states to the European Union next May. The Republic's much-vaunted EU membership will at this point no longer be as much of a commercial advantage as it once was, particularly if the accession states move rapidly on the regulatory front.

Ms Harney says she is "very optimistic" about the economy in 2004 but acknowledges that some companies, particularly in the indigenous sector, are vulnerable to closure as the Republic becomes increasingly expensive.

She points out this was one of the reasons why the Enterprise Strategy Group was established earlier this year to formulate a new industrial policy.

This group is, she says, "working extraordinarily hard", and due to report to her around Easter. In conjunction with this, she and other Ministers have pushed for reforms that make the Republic a cost-efficient place to conduct research and development, or to establish a European headquarters.

It is all part of the "moving up the value chain" strategy that now looks to be bearing fruit in international investments such as EBay and Abbott, both of which made significant Irish expansion announcements this year.

Ms Harney says she has also been talking to Enterprise Ireland's new chief executive, Mr Frank Ryan, about reducing the reliance of domestic exporters on the UK market.

Continental Europe, where currency pressures are not a factor, is the place to be, she believes, adding that the State can only ever be "a door-opener" on this front.

As for the accession states, she says the Republic has "10 years on them all", but warns that this 10-year gap could be crossed sooner than the more complacent might think.