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On his way to Cuba, Martin warns against protectionism.
DUBLIN — In every corner of the Irish parliament on Wednesday evening, elected members and staff stared glumly at their television sets.
Bitter debate had raged in the chamber all day on the country’s banking crisis and now this — Ireland was losing 1-0 against Georgia in a soccer World Cup qualifying match.
In his office, with the television turned off, the minister for foreign affairs, Micheal Martin, sought to put a good face on the country’s woes in an interview for GlobalPost.
I asked him about the popular gibe that the only difference between Ireland and Iceland, which last year suffered practical bankruptcy, was one letter and six months.
“The fundamental difference between Ireland and Iceland is that we are a euro country,” the slim, fast-talking Cork native retorted sharply, “and the overall level of indebtedness in Ireland is low, one of the lowest in the European Union.”
Also the country’s two main banks, Allied Irish Banks and Bank of Ireland, “are solvent” and the government was in the process of recapitalizing them.
Earlier, Finance Minister Brian Lenihan had announced an emergency injection of 3.5 billion euros ($4.5 billion) into each of the two banks in return for preference shares and cuts of at least 33 percent in executive remuneration.
“Clearly we are taking a hit in terms of economic growth,” Martin said, referring to the Irish Central Bank forecast of a 9.5 percent budget deficit this year, three times the European Union’s reference level.
The collapsing property market and a steep rise in unemployment to a 15-year high of 293,000 has resulted in a sharp fall in Irish tax revenues.
“There’s not a country in the world that is not impacted by the unprecedented recession,” protested Martin, who is widely tipped as a future prime minister.
But Ireland “has a strong cohort of emerging indigenous companies that will cope through this recession which are strong in technology, particularly in software and biotech-led sciences, and strong in improved value-added internationally traded services.”
Government agencies had focused on “growing a new breed of entrepreneurs and enterprise and we are still attracting employment — 2008 was actually a good year (for) inward investment.”
One cause of concern, however, was President Barack Obama’s pledge to provide incentives for U.S. companies to create jobs in America rather than overseas.
“We have to keep an eye on this," Martin said. "A very serious danger that could emerge from this global crisis is that there is a natural instinct for countries to go back to protectionism. For Ireland as an exporting country that would be damaging.
“It's not feasible to restrict corporate America to America. If you become a truly global company you have to set up base in the markets you want to sell into.”
Companies such as Boston Scientific, Microsoft, IBM, Hewlett-Packard and Intel were in Ireland as they needed a base in Europe in order to access the market effectively, he pointed out.
For similar reasons Irish enterprises, such as the Kerry Group and Riverdeep, had expanded to the United States. While American companies provided about 95,000 jobs in Ireland, some 200 Irish companies had invested in the United States creating 80,000 American jobs.
There was an upside to the financial crisis. The experience of Iceland had “focused the mind somewhat” on the fact that it was better for Ireland to be at the heart of the European Union rather than the margins.
A majority of Irish voters might now vote ‘Yes’ in a second referendum on the controversial Lisbon Treaty on greater EU efficiency that they rejected last year, much to the embarrassment of the government.
“The underlying trends in opinion polls in the last two months are in favor of moving positively towards a new referendum on Lisbon in the next month or two,” Martin said, though this depended on getting legal guarantees from Europe on controversial issues such as corporate taxation, ethical questions and neutrality and defense.
Martin, who as health minister five years ago made Ireland the first EU country to ban smoking in public places, is heading this weekend to Cuba, home of the cigar.
He is the first Irish minister to visit the island and it follows a change in attitudes to Cuba within the EU, which lifted sanctions last year.
An “overwhelming” number of countries at the United Nations had called for a lifting of the U.S. embargo and “in our view the time is ripe and I think that change would come and that it is inevitable,” he explained.
Ireland’s lack of “colonial baggage” would help make the point to Cuban interlocutors that the island nation should open up more to the world economy.
The Obama administration, he hoped, would adopt “a more relaxed open policy” toward Cuba.
Martin believes Ireland should follow the example of Portugal and show willingness to resettle a number of detainees from Guantanamo as a logical sequence of arguing for the closure of the U.S. detention center.
Martin returned last week from a visit to the Middle East, including Syria, where he urged a “more flexible mindset" on such issues as contact with Hamas.
“If you look at the Irish peace process, everyone had to make steps at some way along the road, including the IRA, so Hamas has to make moves as well.
“If we really want to crack this at some stage all parties have to move. You can’t unilaterally just engage with Hamas.
"The Syrian position to us was, ‘Well, Hamas did make moves two or three years ago but nobody listened.' "
Martin, who unsuccessfully lobbied EU countries to support the establishment of an independent inquiry into possible Israeli war crimes in Gaza, believes the Israeli operation there was absolutely counter-productive.
“It has radicalized opinion on the Arab street and that came across from my own recent visit.”
However “the appointment of George Mitchell and the moves President Obama has taken so far have been very encouraging. We really get a sense of freshness of approach. From our experience of George Mitchell (in Northern Ireland), we trust in his capacity to have a broader view of things.”
In the Middle East, Martin stopped off in the United Arab Emirates, where he announced the opening of an Irish embassy later this year, despite government cutbacks.
There was a logic to this: The UAE has the biggest sovereign wealth fund in the world, which is being eyed by countries with large borrowing needs in the coming months.
After the interview Martin joined officials in the outer office to see Ireland win the soccer match against Georgia 2-1, boosting its chances of qualifying for the World Cup finals, and giving the country, at last, something to cheer about.
Other GlobalPost dispatches from Ireland: