Bertie Ahern (Dublin Central, Fianna Fail)

Barack Obama's proposal is a Democratic Party policy initiative brought forward by John Kerry during the last election and it is something we must carefully monitor. Previously, IDA Ireland had a specialist in the US on contract to watch these developments and to lobby on the issues. The last time Senator Ted Kennedy was very helpful in at least putting the Irish cause at the top level within the Democratic Party so those involved will understand the sensitivities. I understand the argument from a United States point of view. The more money they keep and treat to the best advantage within their own Administration, the better it is for them. However, there are other considerations. US companies invest in Ireland and elsewhere in Europe, giving them access to a market of 460 million people, which they would not be able to access otherwise. Failure to invest outside the US and to have incentives for such investment so that these companies can reinvest, extend and update their innovation and research is a consideration for the United States if they want to successfully grow their own multinational companies to invest all over the world. There is a strong case. Once again, the issue has come up and we must follow the debate to make sure we put our case. We will do that, but many senior people such as Senator Chris Dodds and others are very familiar with our argument and our presentation. However, it is not just about Ireland. It is about all of the investment companies out of the United States and we must deal with that.

On the second issue, there is no doubt that in any negotiations on social partnership the issue of competitiveness is crucial because so many jobs in this country exist, or in many cases co-exist, because we are able to produce goods and services and export them at a productive rate which allows us to be able to compete in the international market and provide jobs at home. If one's competitiveness is lost the danger is always that one can lose these jobs. This is well understood in the social partnership process.

It is not just an issue of wages and salaries, which are obviously one part of competitiveness. Increasingly in recent years, there is also the tax take — our taxes on employment and labour have been low by international standards. There are insurance costs, which we have brought down enormously over the past number of years. There are also energy costs and infrastructural costs. The reason we spend 6% of our GDP on infrastructure is to make it competitive. All of these arguments come into it and in this round of negotiations, like every round, the Government side, and also the employers and trade unions, would be conscious of competitiveness.

While most of the current job losses are in the residential construction side, we are still doing very well in foreign direct investment and we are developing indigenous Irish companies. We are doing extremely well and I think we are the number one exporter of services internationally, which is an enormous achievement by our companies. There is no ground for complacency in that.

On the third point, one can never pay any more than can be afforded in fair negotiations. Really, what social partnership and all the reviews done into this are about is that we pay our public servants and our private sector workers what is achievable within an economy. Yes, there are pressures internationally. One only has to pick up an international commentary to see the difficulties out there such as what happened in sub-prime lending, the financial downturn, inter-bank borrowing difficulties and the loss of confidence in many parts of the world about the future. These are all difficulties and one way or another to some extent they affect us and we must be conscious of them.

This country is still strong. Employment is strong. Our debt ratio is historically low. Where there are pressures we just have to manage them in a sensible way. The reality is that all the underlying strengths of the Irish economy are positive. We just have to manage ourselves through a sharp international downturn. If we do that, as we have done in recent years, we will get the bounce as soon as the international economy bounces.

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