Irish Prime Minister Enda Kenny is leading a global St Patrick’s Day charm offensive that seeks to woo investment from the US, China and other countries to debt-crippled Ireland.
Kenny arrived in Chicago on Friday to begin a five-day US visit that concludes on Tuesday with St Patrick’s Day festivities in the White House. The Washington events are happening three days late because this year the March 17 holiday falls on a weekend.
Kenny has deployed 16 of his government’s ministers to Canada, China, Singapore, Australia, New Zealand, nine European neighbors and several other US cities from Boston to San Francisco.
Most of his other 13 ministers are presiding over the dozens of parades, performances and celebrations at home, particularly in Dublin, where a four-day festival started on Friday and was to peak yesterday, when about 500,000 spectators were expected to line the main Dublin parade route.
The focus on boosting Ireland’s image abroad reflects the stark economic challenges facing the one-time Celtic Tiger. Today, the Irish are struggling to reverse a 14.4 percent unemployment rate, slow a renewed wave of emigration and rebuild a battered credit rating that forced the country to negotiate a humiliating 2010 bailout.
“Now is the time to invest in Ireland’s recovery,” Kenny said. “The government will use the unique global opportunity of St Patrick’s Day to bring that message to all our key global markets and to Ireland’s many friends around the world.”
Ireland’s diplomatic efforts are double the size of St Patrick’s Day missions last year, when Kenny had just taken power following a landmark election that devastated the previous government. It was blamed for leading Ireland to the brink of bankruptcy by fueling a runaway construction market fed by tax breaks and cheap credit from Ireland’s ill-regulated banks.
When Ireland’s property boom went bust in 2008, the government sought to save those banks from collapse by promising to ensure all their debts against default. That gamble failed to stem a tide of fleeing capital from Ireland and left taxpayers on the hook for repaying potentially 70 billion euros (US$92 billion) in bank losses.
That bill, far too big for Ireland to finance, required a 67.5 billion euro credit line with the EU, European Central Bank and IMF. The money is supposed to cover Ireland’s bills until late next year, by which time Kenny’s government hopes to resume normal borrowing from bond markets.
However, economists agree that Ireland’s recovery depends on forces beyond its control, particularly whether the US economy gets rolling again.
More than 600 US multi-nationals have already made Ireland their EU base, providing more than 5 percent of the nation’s jobs and 12 percent of its entire GDP. US companies favor Ireland’s English-speaking work force, participation in the eurozone and particularly its low 12.5 percent rate of tax on corporate profits.
Economists are counting on export-led growth by US-focused multinationals to compensate for the debt crisis overshadowing most, if not all, of Ireland’s 4.5 million people.
The existing bailout deal requires Ireland to slash its deficits to 3 percent of GDP by 2016. Last year’s deficit stood at 10 percent. The target this year is to reach 8.6 percent, but this means yet more spending cuts and tax hikes in a country where hundreds of thousands have lost their jobs, are trapped in negative-equity mortgages and are clamping down on spending.