IDA strongly supports the Lisbon Treaty

23/05/2008

IDA
Properly functioning Single Market critical to attracting future foreign direct investment.

Dublin, May 23rd 2008 - IDA Ireland today voiced its strong support of the Lisbon Treaty stating that its endorsement is based on the key role that Ireland’s membership of the EU has played in persuading almost 1,000 overseas companies to sustain over 150,000 full-time and part-time jobs in Ireland. These companies account for 85% of our manufacturing exports, spend €15bn per annum in the Irish economy and contribute almost 47% of the corporation tax take, valued at c. €3bn in 2007.

Barry O’Leary, CEO IDA Ireland, commenting said “The Single European Market, which allows companies based in Ireland to sell their goods and services freely throughout the European Union, has been one of the major factors enabling Ireland to secure a disproportionate amount of US green-field investment locating in Europe over time”.

IDA Ireland believes that multinational corporations have invested in Ireland on the basis that Ireland is at the heart of a vibrant and efficient Single European market. Conversely, any threat to the continued efficiency and dynamism of that market would be viewed negatively and be detrimental to its future investment prospects, particularly impacting the smaller member states, such as Ireland.

Mr. O’Leary added “The efficient working of the Single Market and its extension into new areas of Financial and traded services is vital if IDA Ireland is to continue its success in winning future valued added investment and highly paid jobs for Ireland. In a Europe of twenty-seven plus member states a proficient market can only be guaranteed if the decision making process is well organised and stream-lined and that is what the Lisbon Treaty provides for”.

Taxation and Investment
The opportunities presented by the European market to multinational companies investing in Ireland are complemented by the talented Irish work-force and our attractive Corporate Tax rate of 12.5%. This tax rate is fully compliant with the provisions of all EU treaties and nothing in the Lisbon Treaty changes that position. Furthermore, the Lisbon Treaty provides for a continuation of the current status and any changes that might affect it can only be taken by the unanimous vote of all member states. Therefore, Ireland retains its veto in tax matters, thus maintaining international business confidence and ensuring Ireland continues to remain an attractive investment location.

From IDA Ireland’s perspective a favourable corporate tax regime alone will not attract and retain substantial investment as it is only relevant when a company can operate profitably in the marketplace. The Lisbon treaty enables Ireland to offer both – a low tax regime in the heart of a growing European marketplace.

EU Role in Foreign Direct Investment (FDI)
In recent weeks, IDA Ireland has noted much comment about the section of the Lisbon Treaty under which the EU’s Trade Agreements with other countries are negotiated. This is known as the Common Commercial Policy (CCP) and for the first time this makes reference to Foreign Direct Investment (FDI). However, this reference simply gives formal recognition to the current status quo. Existing free trade agreements negotiated under the Common Commercial Policy today set out bi-lateral rules in relation to investment by EU companies in other countries.

These agreements are negotiated by the European Commission on the basis of a mandate given to it by the member states and must be subsequently approved by the member states. Furthermore, the Lisbon Treaty clearly stipulates that in areas such as trade in service, intellectual property and foreign direct investment where unanimity is currently required, this unanimity will remain the case in the future. Nothing in the Treaty poses a threat to Ireland’s ability to continue to frame its FDI policy to meet our future needs.

“A YES vote on June 12th and the ratification of the Lisbon Treaty will enable a dynamic single European market to function properly as the EU grows and is crucial from a business perspective. It will certainly support IDA in winning high quality overseas investment and well paid jobs into the future, a critical component of making Ireland a leading knowledge-based economy” Mr. O’Leary concluded.

Media contacts for further information –

* IDA Ireland – Ruth Croke, Press & PR Manager. Tel: 087 4195051, ruth.croke@ida.ie
* Trevor Holmes, Head of Corporate Communications. Tel: 087 2425560, Trevor.holmes@ida.ie

Key Features of EU Reform Treaty

The main purpose of the EU Reform Treaty is to introduce a series of institutional reforms designed to prepare the Union of 27 Member States for the challenges of the 21st century.

The key features of the Treaty are:

* to streamline and speed-up the decision making process between the European Council, Commission and Parliament
* to set out the Union’s powers and limitations in areas where the Member States have agreed that the EU should have a role
* to create a new voting system in the Council of Ministers to make decision-making more efficient, effective, democratic and transparent.
* to create a full-time President of the European Council and a High Representative for Foreign Affairs & Security Policy which will overall result in better internal work coordination and a more coherent approach to external affairs
* to provide a greater role for national Parliaments as influencers and controllers in the EU’s legislative and decision making processes
* to make the Charter of Fundamental Rights part of EU law