Ireland will need to play hardball on Brexit field
We carved out niches in food and aviation. Now we must up our game to attract banks, writes Fearghal O’Connor
THINGS are hotting up around Europe when it comes to grabbing the banking jobs fleeing London due to Brexit — and Ireland is in danger of being left behind.
French president Emmanuel Macron is pulling out all the stops. He has sent his junior economy minister, Benjamin Griveau, to London. Don’t be confused by the lowly title. Griveau is one of Macron’s closest personal allies, a member of the tight circle who have vowed to reform France. He went to Britain with a very clear message for bank executives looking for a new home.
“Now, Mr Griveaux is being tasked by the French leader to throw his political weight into France’s aggressive efforts to woo London bankers to Paris ahead of the UK’s departure from the EU,” the Financial Times reported.
But while the French set about the attraction of business with an uncharacteristic zeal, the Irish government, from the outside, appears to be giving its own version of the Gallic shrug.
“If the banks come they come, if they don’t they don’t,” appears to be the public stance.
Last week, the Irish Independent reported that the Central Bank of Ireland has not recorded an uptick in the number of banks and financial services firms considering establishing a European hub in Dublin. Of course, in June Central Bank Governor Philip Lane insisted — perhaps rightfully — that it is not the Central Bank’s job to promote the financial services sector in Ireland.
Earlier this year Minister Eoghan Murphy said “other cities in Europe are being very aggressive in trying to win business”.
Indeed, rivals for the lucrative banking and financial jobs are said to be offering all sorts of sweeteners, such as looser regulations. All this at a time when European Commission President Jean-Claude Juncker is once again raising the spectre of the Common Consolidated Corporate Tax Base (CCCTB).
Fiscal Advisory Council chief Seamus Coffey described the threatened introduction of CCCTB as “more serious” than Brexit for Ireland, not least because of its impact on Ireland’s ability to attract inward investment, including banks.
There have been some wins of course. US bank JP Morgan has bought the landmark Capital Docks office building for its new Dublin operation and there are perhaps another dozen confirmed wins for Ireland of Brexit refugee companies.
But given the pain Brexit is set to inflict on this country, history will likely judge poorly any missed opportunities from the political upheaval.
Winning a critical mass of those financial jobs could transform the financial services industry here in a way that could prove as important as any previous influx of investment.
But attracting and building a world-class sector to a region or country does not just happen unaided. Ireland has excellent experience of this from previous success stories. Look at what Denis Brosnan and his Kerry Co-op colleagues achieved in the 1970s when they pushed a simple idea as far as they could. Kerry Group is now one of the world’s great food companies and underpins the entire economy of the south-west.
The growth of the pharmaceutical industry around Cork harbour and, of course, most of all, the arrival of the tech industry are other examples. Both happened because various governments beginning with industrial authorities and State agencies bent over backwards to meet their every need. And that all stemmed from a visionary plan drawn up by public servant TK Whitaker.
Or take the aircraft-leasing business. It started out as a slightly madcap plan to offload an Aer Lingus 747 to Siam by one man, Tony Ryan.
The seed was planted and out of the ruins of the GPA flotation blossomed the Irish aircraft-leasing business, which now dominates the sector globally. But that position of strength only happened because of a massive combined political and business effort to create the right environment in Ireland for that business and to go out around the airlines of the world and aggressively win business.
The lesson is that we will not win banking and financial investment by being polite and waiting our turn to speak.
Since assuming the role of Taoiseach, Leo Varadkar — like Macron in France — has proven adept at presenting to the outside world an image of a suave leader for the modern age. But for a long time, the Government he has taken over, and has been a part of, has a simple default mode: when confronted with difficult issues bolt for the long grass and ask someone to write a report.
The latest example of this were this newspaper’s revelations of the Government’s less than enthusiastic response to German community bank Sparkasse’s ambitions to establish its model here. Every difficult decision is postponed.
“Get rid of it!” Ministers nearly cry, as if they are standing on the sideline of a Junior B football match in their local club when the ball comes into the overweight corner back.
But everything about Leo Varadkar’s image is the opposite of the overweight corner back. He presents himself as the silky skilled wing forward who can score the winning point.
The banking opportunity may be his chance to prove it. But as any successful Gaelic football team will tell you, it takes many days of hard graft — as well as a tough, hard edge — if you want to climb the steps of the Hogan Stand and claim the big prize.