Bernard Durkan (Kildare North, Fine Gael)
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Question 244: To ask the Minister for Enterprise, Trade and Employment the steps he has taken or proposes to take, directly or in consort with his EU colleagues to ensure the ongoing competitiveness of this and other European economies, having particular regard to ongoing job relocation to lower cost economies; and if he will make a statement on the matter. [8107/08]

Micheál Martin (Cork South Central, Fianna Fail)
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It would be entirely misleading to suggest that plant relocation or company restructuring giving rise to job losses, whether due to individual firm or sector challenges, indicate that whole economies are uncompetitive. Companies allocate their resources and plant location strategies for many practical and business reasons such as to be closer to key customers, to have access to specialist skills, to address market needs or customer relationship requirements. Firms do not necessarily relocate because of cost issues alone.

One feature of a competitive economy is the growth and flexibility it shows in creating new employment to replace jobs that are lost. The economy is dynamic and jobs will inevitably be lost as sectors decline, new products replace older ones and competition changes how business is done. Ireland clearly is meeting this aspect of competitiveness.

Nevertheless the international operating environment for business is not as benign as it has been over the past few years. This increases the importance of driving productivity growth to counteract the numerous external pressures that are emerging in important areas such as financial and commodity markets. In addition to broad, pro enterprise policies, my Department has given a strong mandate to its development agencies to deliver a wide range of measures to help strengthen their clients capacity to undertake more and better innovation, research, technology acquisition and skills development. These are the competitive characteristics on which Ireland will grow. They will be consistently improved and developed to match the changing needs of business.

In key aspects Ireland remains a strong competitive and efficient location for many sectors. Our competitiveness is robust in the new enterprise sectors on which we are building a growing international reputation. This is borne out by the successful pipeline of R&D projects that IDA Ireland is winning in the face of exceptional competition from other developed countries.

To address inflation and with a view to keeping costs for enterprises under control, the Government and the Social Partners have agreed to intensify co-operation in responding to inflationary pressures within the framework of the pay agreement, and especially through the work of the Anti-Inflation Group and the High Level Group on Manufacturing.

On 25th February, 2008 I attended the EU Competitiveness Council held in Brussels. The Ministers rededicated themselves to fully implementing the Lisbon strategy by progressing the remaining reforms in their National Reform Programmes (NRPs). The Ministers identified four particular areas of concentration, namely investing in people and modernising labour markets, unlocking the business potential, especially of SMEs, investing in knowledge and innovation and energy and climate change. The achievement of the Lisbon objectives also depends on the creation of an effective single market. Coupled with those aims is the commitment to developing and improving education at all levels and to making lifelong learning, in particular, a factor in building the knowledge society.

In general, from Ireland's perspective, the Commission's recent strategic Report on the implementation of the Lisbon strategy reported that Ireland continues to make very good progress in the implementation of our NRP and good progress on most of the commitments made by the Spring European Council. Progress was also good over the full 2005-2007 period with regard to the implementation of policies to address micro-economic challenges, notably improving competitiveness, infrastructure, regulation and social inclusion, increasing R&D investment and efficiency, encouraging greater innovation and entrepreneurship and sustainable development.

In preparation for the Spring Council, 2008 the Member States and the Commission are currently drafting the new Community Lisbon Programme (CLP) for the period 2008-2010, setting out the key Community-level measures. The proposal for a new Community Lisbon programme is based on the integrated guidelines and sets out ten ambitious but realistic priorities that should be achieved at the Community level by 2010.

This new cycle of the Lisbon Strategy presents the EU with renewed vigour to implement this strategy, despite the new uncertainties in financial markets that are now a cause for concern. Active implementation of Lisbon has shown how much it can contribute to extending national and European competitiveness. The importance of science, R&D, innovation, skills and training policies and better regulation are paramount. I believe that the road to meeting the wider environmental challenges of climate change and energy as well as the trade and development issues have most chance of success if managed collaboratively at EU level.