RegionsEEAIACT 2015: Ireland’s economic role in Europe

IACT 2015: Ireland’s economic role in Europe

Chief economist at NTMA, Rossa White, and MEP Brian Hayes spoke at the IACT conference in Dublin this week about Ireland’s economic journey and in what direction the country will move in the future.

Chief economist at National Treasury Management Agency, Rossa White, and Member of European Parliament (MEP) Brian Hayes spoke at the Irish Association of Corporate Treasurers conference in Dublin this week about Ireland’s economic journey and in what direction the country will move in the future.

Financial professionals worldwide are eagerly awaiting the result of the US Federal Reserve meeting in mid-December which will determine whether or not interest rates will rise. The extent of how far this symbolic event will affect treasurers is yet to be seen and White questioned if the world can withstand an interest rate hike, especially if more will follow.

White also spoke about how while Ireland has a fast-growing economy, China is still growing. “China’s share of the world economy has increased dramatically and it will still be a big player for many years,” White said, as he highlighted how China may soon have a good welfare system and pension scheme.

In addition to this, Brazil’s economy has slowed down now because of the Chinese market after struggling for a number of years before the start of this century.

Vigilance is also a significant word for Ireland as a European Central Bank meeting is also approaching in early December, where they will discuss how beneficial qualitative easing will be for treasurers. Qualitative easing can be defined as a change in central bank assets where they become less liquid and riskier, but the size of the balance sheet remains constant.

Mario Draghi, president of the European Central Bank, has recently been quoted to say that people only want to remain a part of something that they can gain something from, as Hayes explored. “As Mario Draghi said recently, people only want to join something or stay in something if they see a benefit in it. Benefits must be understood by ordinary people living their lives and that’s where the entire question of the future of the Eurozone is so linked to reform of the EU itself,” Hayes said.

Being aware that the future is subject to change is very much the attitude that Hayes took as he commented on how we do not know where the Eurozone will be in five or ten years, but there is potential for long-term growth. “With a more coordinated currency union the EU’s internal market will work more efficiently. Additionally, those countries that do adopt the Euro have to comply with prudent and sensible budgetary rules such as keeping debt to 60% of GDP and having deficits of less than 3%,” Hayes said.

The events of last week in Paris loomed in the background as terrorism, as well as migration, are complex issues that can affect the financial industry unexpectedly; European reform is necessary and this can only be done with proper integration of the Eurozone.

“We need more Europe not less. We need more integration not less. We need a properly functioning internal market that delivers more jobs and cuts costs for consumers,” said Hayes.

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