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General
Enterprise will lead economic recovery

A year and a half ago, the Irish economy nearly collapsed. Domestic fiscal and financial woes collided with a global economic tsunami that prompted questions as to whether we had any control over our economic future. Since then, things have improved, and thousands of businesses across the country continue to successfully trade their way through the crisis.

While major challenges remain, we have passed a number of difficult but crucial milestones on the way to recovery. It is essential that we now channel our collective efforts into restoring the country’s reputation and our economic fortunes.

We have overcome economic challenges in the past, and the business community, for its part, is ready and able to again play a major role in the recovery.

Years before the property bubble began sucking resources from the productive parts of the economy, Ireland had a sustainable template for economic success. From 1993 to 2000, Ireland cultivated a dynamic, competitive, productive economy, which delivered growth, wealth and employment levels never before witnessed. We retain the skills and ambition to do so again.

Enterprise can again lead the country out of recession by doing what it does best: trading Irish goods and services, providing jobs, creating wealth and ensuring a sustainable economic future.

Getting people back to work is the single biggest challenge facing this country. While the economy is now on the verge of exiting recession, the shape of the recovery and its capacity to generate new employment will depend significantly on the Government’s enterprise and employment policies, and on the capacity of private enterprises to grow.

To drive economic recovery, the Government must also revisit the public capital investment programme. The pipeline for new capital projects has become worryingly empty. The Government urgently needs to set out a revised investment programme for the coming years, which takes into account the policy implications of NAMA and the new reality of the public finances.

The economic crisis will leave emotional and financial scars on Irish society, but the best way to overcome these is through rebuilding. It has reinforced the need to foster an outward-looking enterprise-led economy. This is where our economic success came from in the past, and it is where our future must rest. To achieve this we need to work together and take advantage of new opportunities as they arise. It means dealing soberly and decisively with the economic realities we now face.

We all need to look forensically at what went wrong. We must learn the lessons and ensure that a crisis of this magnitude never happens again. While we cannot change the past, we must change our future.

This is an extract of Danny McCoy's op-ed in the Irish Times on Friday, 16 April. Read the full text of the article here.



IBEC launches corporate restructuring guidelines

As part of our ongoing commitment to members, IBEC has developed comprehensive corporate restructuring guidelines to provide an overview of key management and regulatory issues for companies in distress.

The guidelines are aimed at companies who are thinking about, going through or have recently completed a restructuring programme. They are a resource to you as a valued IBEC member, and we hope they assist your business through the current crisis.

IBEC executives, leading law firms and specialist consultants have contributed to this document. All are acutely aware of the major challenges currently facing Irish business. If you need more information on any of the subjects covered, we provide a number of links that will direct you to further reading, advice and resources.

Be assured that members will have the fullest support, advice and representation from IBEC in the period ahead. If you have any further queries please contact your IBEC executive. We are anxious to assist in any way we can.

The guidelines are:

Restructuring decision tree

Economic context

Corporate governance

Retention of title

Managing debt

Landlord and tenant

Pensions

Employement issues

Mediation

Competition compliance, mergers and state aid

Insolvency

Procurement

Auditing, accounting and taxation

 



Defined benefit pensions funding proposals deadline extended

Any defined benefit pension scheme that is struggling with its solvency now has a further five months within which to prepare and consult on proposals to bring the scheme back to the solvency standard required by the regulator.

The extension applies to defined benefit scheme funding proposals and applications to increase the retirement age, aimed at restoring solvency. It applies, however, only to reports due in 2010 and the schedule for reports due next year is unchanged.

See below for revised deadline dates.

Current submission deadline

New submission deadline

30 June 2010

30 November 2010

31 July 2010

31 December 2010

31 August 2010

31 January 2011

30 September 2010

28 February 2011

31 October 2010

31 March 2011

30 November 2010

30 April 2011

31 December 2010

31 May 2011

31 January 2011

31 January 2011 (no extension)

The board granted the extra time to allow schemes to look at increasing retirement ages in the aftermath of the new national pensions framework. The framework, published in March, announced a staggered raising of the State retirement age over the next 18 years.

Department of Social and Family Affairs (SI 148/2010) allow defined benefit pension schemes to increase the normal retirement age not just for active members but also for deferred members. Previously, this was only possible for active members of a scheme. The Pension Board’s decision allows companies to consider these new regulations in proposals aimed at bringing the scheme back to required solvency standards.

This can be done by means of a so-called section 50 application under the Social Welfare and Pensions Act 2009 which allows, under certain strict conditions, members benefits to be cut in an effort to save a scheme and restore it to solvency.



Events-through-pictures

Gen_SFA_April_2010Glenisk was the overall SFA National Small Business Award winner 2010. Speaking at the awards An Taoiseach, Brian Cowen, TD, said: “The SFA’s National Small Business Awards provide welcome opportunity to acknowledge the crucial role played by small business in creating and sustaining wealth and jobs in the Irish economy. It is an opportunity that is all the more significant given the challenges currently facing us. The National Small Business Awards continue to showcase the best of innovation and ingenuity in Irish enterprise. I sincerely congratulate all of the 2010 finalists and wish you every continued success for the future.” At the event were (l-r): An Taoiseach, Brian Cowen TD; Gerard Cleary, Glenisk; and Aidan O'Boyle, SFA Chairman.


Human resources
IBEC health and safety training courses and information

Highlighting the responsibility of employers to manage health and safety at work is the focus of modern legislation in this area. IBEC’s health and safety courses look at developing the use of internal resources for managing the issues that directly affect employers, alongside helping organisations put into place their own specific management systems.

Each course is reviewed regularly to ensure it is up-to-date with the  legislative and guidance standards, as well as ensuring that it represents best practice for the specific needs of our members.

Find details of the courses at http://www.ibec.ie/0/Health_and_Safety_Training. Courses over the coming months include:

  • IBEC/UCD certificate in safety and health at work
  • managing safety for line managers
  • first aid certificate and refresher courses
  • accident management workshop
  • office safety workshop
  • safety representation consultation course
  • safety officer and co-ordinator course
  • manual handling instructor and assessor training refresher
  • manual handling and assessor training refresher course
  • fire safety/emergency preparedness.

As an IBEC member, you also have access to a wealth of information on health and safety management practices. A new item added to the website looks employers’ responsibilities in relation to tele/homeworkers.



Updated guidelines on employing Bulgarian and Romanian citizens

Some employers assume that because Romania and Bulgaria have been EU members since 2007, nationals from these countries can automatically work in Ireland if they have a PPS number. This, however, is not the case.

Inspectors from the National Employment Rights Authority (NERA) have the power to check whether companies are in compliance with the employment permit legislation. Those found to have hired staff without valid working permits can be liable to substantial fines and/or imprisonment.

The Department of Enterprise, Trade and Employment recently released updated guidelines on employment permit rules for Bulgarian and Romanian nationals, including the categories that do not need an employment permit.

The Irish Government has decided that until at least 2011, Bulgarian and Romanian citizens will require a work permit for the first continuous twelve months of employment in the State. At the end of this twelve-month period, a Bulgarian or Romanian national is free to work in Ireland without any further need for an employment permit.

In addition, Bulgarian and Romanian nationals who:
  • have a primary degree or above  from an Irish third level institution, and
  • have worked for 12 months or more after 1 January 2007 while a student

will not require an employment permit after graduation.

IBEC has produced a number of documents on the employment permits legislation to help members understand their obligations and comply with the procedures. These range from a guideline on employing non-Irish nationals to more detailed advice on work permits and short-time working and work permits and redundancy.

If you have any further questions, please contact the employee relations information unit at eriu@ibec.ie.



Block on temporary staff at Passport Office outrageous

The huge backlog at the Passport Office was a massive inconvenience to business travellers. In response, IBEC called for temporary staff to be immediately taken on to resolve the problem. Over 66,000 passport applications are waiting to be processed.

IBEC Director Brendan McGinty said: "In addition to the enormous inconvenience to the travelling public, many important business trips have been disrupted because of the backlog. This is the last thing we need given the current economic circumstances.

"It is a disgrace that Passport Office workers are now benefiting from generous overtime payments, as they clear a backlog created by their failure to do the work in the first place. Temporary workers should immediately be employed.

"The travel disruption caused by the dispute is affecting holiday plans and important business trips. The cost of this disruption is considerable and is particularly galling, given that it could so easily have been avoided."


Employment permits still being issued despite recession

The figures for the first quarter of this year show a 30% drop in the number of new applications for employment permits from 1,200 in 2009 to 870 in 2010. The number of renewals, however, increased by 43%, meaning that the overall change in permits issued remains relatively steady recording only a 5% drop in permits.

The employment permit system was slightly reformed in the middle of 2009. The main changes relate to the introduction of a labour market needs test at renewal for all permits issued after 1 June 2009. Though the changes do not yet have an impact on employers, companies in the process of obtaining a new work permit should be aware them.

If you have any questions or comments please contact Alan O’Kelly at alan.okelly@ibec.ie.



Economic affairs
Seeds of recovery need to be fostered

Without doubt, the Irish economy has suffered a tremendous body blow in the last two years, which will carry forward a legacy of debt for some years to come. However, we can now hope that the worst is behind us. Now the focus must be to restore the economy to the productive dynamic force it was prior to the construction bubble of the last decade.

The Government must play a significant role in shaping the recovery by its enterprise and employment policies, which in large measure have been neglected over the last two years. The restoration of confidence will play no small part in expanding domestic demand, which collapsed so disastrously with the fall in construction activity.

Crucial in this will be revisiting the public capital investment programme as the National Development  Plan, which was to run until 2013 has in large part been abandoned. The pipeline for new investment projects is now worryingly empty and given the surplus capacity in the construction sector, there is an opportunity to carry out necessary projects to ensure growth in the future, maximising value for money and at the same time providing much needed employment to help revitalise domestic demand.

There is much to build on. We must not lose sight of the fact that many enterprises continue to thrive and provide employment for nearly 2 million people.

There are sufficient signs from the hard data for the first two months of 2010 and the softer survey data from the Purchasing Managers Index for March that manufacturing and services’ output  has hit the bottom and in several sectors is starting to recover. The IBEC Business Sentiment Survey for the first quarter of 2010 also reflects this rising optimism.

The global uplift that began in the third quarter of 2009 is now having a beneficial impact on demand for output of both goods and services, particularly those of multinational companies; the more traditional – and employment intensive – sectors have a harder hill to climb.

Recovery in the multi-national sector, though very welcome, will not be sufficient to generate enough employment to make up the job losses incurred over the last two years nor generate sufficient exchequer revenue to substantially reduce the public finance deficit. More widespread growth from domestic activity is required.

On the demand side the uncertainty facing the consumer, which drove people to increase their savings in 2008 and especially in 2009 is now easing. Retail sales data for the first two months of the year suggest that the steep decline in retail spending has bottomed out and the consumer sentiment indicators recorded an ongoing improvement in March. The firm action taken in the last Budget, concentrating corrective action on spending rather than further  tax increases has helped restore consumer confidence.

However, we need to bring added stimulus to domestic demand through ensuring indigenous companies and small firms have access to credit and trade credit insurance which will allow them to flourish; it is companies such as these that will play an important role in providing more employment, which will further boost confidence and consumer spending.



Businesses more optimistic: IBEC survey

Though many companies are still uncertain or pessimistic over the operating environment, the results of the IBEC business sentiment survey for Q1 2010 show a marked improvement in sentiment.

Fewer companies rated the operating climate as poor or very poor in the Q1 2010, down to 59% from 77% in Q1 2009. Correspondingly, the share with a positive outlook has doubled to 12% since the February 2009 survey.

Future expectations also improved and 17% of companies expect the business environment in three months’ time to be good or very good, compared with only 6% in Q1 2009. The share expecting the environment to be poor or very poor is down to 49% from 74% a year earlier.

The positive trend continues when companies describe their own business. A quarter consider their own business as either good or very good currently, up substantially from 2009.

Encouragingly, companies also appear more optimistic about the future. Over a quarter of companies expect their own business in three months’ time to be good, while only 34% have a negative outlook. This again is an improvement on 2009, when nearly half of companies expected their own business to be ‘poor’ or ‘very poor’.

The share of companies expecting turnover to increase in the coming three-month period increased to 37% in Q1 2010 from 22% in Q1 2009, On balance, more companies expect an increase than a decrease, a substantial improvement on Q1 2009, when 59% of companies expected turnover to fall.

Companies’ expectations around profitability also improved throughout 2009, a trend that continued into 2010. In Q1 2010, 31% expected profitability to decrease, down from 64% in Q1 2009.

Domestic sales are improving, with 27% in Q1 2010 expecting sales to increase in the coming three-month period, up from 15% in Q1 2009. Only 25% expect sales to decrease, compared with 52% in Q1 2009.

Outlook in relation to order books has also turned more positive. More companies expect order books to increase (32%) than to decrease (21%). This compares to Q1 2009, when only 17% expected an increase and 45% expected a decrease.

The pressure on margins, however, looks likely to continue in 2010: a third of companies expect the selling price per unit of output to fall.

Though the outlook in relation to employment has improved, more companies still expect to decrease employee numbers (29%) than expect to increase staff (16%). The labour marker appears nonetheless to be stabilising; in Q1 2009, 52% of companies expected to decrease employment, while only 9% expected to hire additional staff.



Retail figures indicate Ireland exiting recession

Econ_Retail-salesLatest CSO figures show that retail sales grew by an annual 3% in February – the first time since February 2008 that sales recorded year-on-year growth. The return to positive territory was mainly driven by the strong rise in car sales, helped by the scrappage scheme.

Sales excluding cars, fuel and bars, however, also showed a definite improvement. The annual pace of deceleration slowed to 0.8%, with a monthly increase of 2.5%. This is the clearest indication yet that consumer spending has bottomed out.

It is notable that a number of sectors are now showing annual growth, including cars, department stores, furniture and lighting and electrical goods. This is in marked contrast to 2009, when all sectors posted falling sales. Sectors still deeply in negative territory include hardware, paints and glass; books and stationery; fuel; and bars.

The December Budget, which brought no tax hikes, together with the stabilisation in the labour market has helped shore up confidence and consumers are feeling more certain about their future income levels. This is reflected in the consumer sentiment index and now also in the hard data and it would appear that consumers are now more willing to commit to big ticket purchases they may have postponed last year.

The retail data, together with recent positive manufacturing and consumer sentiment figures, are further hard evidence that the economy is emerging out of recession.

Econ_Retail-sales



Long-term unemployment threat for Ireland

Econ_UnemploymentLabour market data for the final quarter of 2009 show that long-term unemployment accounted for 33% of total unemployment, up from 22% a year earlier.

The continued rise in the long-term unemployment rate and the fall in those classified as short-term unemployed suggests an emerging structural unemployment problem. Those previously employed in construction or traditional manufacturing are struggling to obtain new jobs in other sectors of the economy.

The significant increase in long-term unemployment is one of the biggest challenges facing the Government. The new cabinet must put jobs and economic renewal at the very top of its agenda. It is vital that every government department plays its part in getting people back to work and restoring our economic fortunes.

The data also show that employment fell by 8.1% in the year to Q4 2009. There are now 1.89 million people in employment, down from 2.15 million at the peak. Almost 170,000 jobs were lost in the last year: 70,000 of these in the first quarter of 2009, with the pace slowing considerably since then. Unemployment has risen to 267,000 and the unemployment  rate climbed to 13.1%, higher than indicated by the Live Register for the same period.

Construction remains the sector under the most pressure, with no sign of a bottoming out yet. Construction employment numbers fell by 80,000 in the year and 15,000 of these were lost in the final quarter of 2009. Over 10% of total job losses were in manufacturing. Somewhat surprisingly, the hospitality sector held up well during 2009, while the information and communication and health sectors also saw a modest increase in employment levels.

Econ_Employment



Manufacturing sector back to growth

Econ_Manufacturing-chartThe latest manufacturing output figures released by the Central Statistics Office recorded an annual rise in manufacturing output in the first two months of the year of 10.5%. This follows falls in output of 3.5% in 2009 and 2.2% in 2008. The CSO data confirms the positive trend indicated by the most recent NCB surveys of manufacturing purchasing managers.

This growth has effectively overturned much of the fall in output suffered throughout 2009 and is an indication that the manufacturing sector  is beginning to emerge from recession.

On a seasonally adjusted basis, there were evident signs of growth in both the modern and traditional sectors. The overall level of manufacturing output, as measured by the seasonally adjusted series, is close to the level reached in the first quarter of 2008, having fallen by almost 11% in the period to the fourth quarter of 2009. The modern sector is some 7% above Q1 2008 and is close to the peak of modern sector output reached in June 2009.

The pharmaceutical sector was responsible for the continued strong performance of the modern sector throughout the recession with pharmaceutical output peaking around mid-year 2009, almost 40% higher than in the first quarter of 2008. Having slipped back by almost 15% in the second half of 2009, it recovered almost all of this fall by February 2010.

The computer, electronics and optical equipment sector crashed spectacularly over the course of 2008 and 2009 with the seasonally adjusted level of output falling by almost 50% between the first quarter of 2008 and third quarter of 2009. Since then output seems to have stabilised, with one or two subsectors showing signs of an  upturn.

The traditional sector is clearly bottoming out, having fallen by almost 20% between the first quarter of 2008 and the middle of 2009. In the first two months of 2010, output had recovered by 8%. Parts of the food sector, which continue to be under serious competitive pressure from the fall in sterling, were also showing signs of turning the corner.

This is a positive start to the year, but the restoration of normal credit facilities and some support for companies still struggling are crucial for ensuring that this promising start to the year could be built on.

Econ_Industrial-production-



Enterprise & infrastructure
IBEC welcomes move to deregulate energy market

IBEC welcomed the Commission for Energy Regulation’s (CER) decision to fully deregulate the retail electricity market for all business customers from the 1 October 2010. However, a regime of monitoring and remedies is required to protect business consumers and ensure effective competition, should problems arise around deregulation in any market segment.

IBEC senior energy executive Erik O’Donovan said: "Business customers account for 62% of the total energy consumption in the electricity retail market. Deregulation will increase competition and should deliver benefits to consumers.

"Increased competition and a fall in fossil fuel prices have already resulted in a significant decrease in energy prices, but more needs to be done. Electricity costs remain too high relative to our European competitors.”

For more information on IBEC's energy policy, contact Erik O'Donovan at erik.odonovan@ibec.ie.



Telecoms industry estimates a potential cost of €2.5bn to build NGA infrastructure

Gen_TIF-launch-1A new report launched by the Telecommunications and Internet Federation (TIF) estimates that it could cost up to €2.5 billion to build a new multi-platform access network. At the launch were (l-r): newly-elected TIF chairman John McKeon, eircom; Peter Evans, vice-chairman of TIF’s broadband and NGN industry group, BT; and Tommy McCabe, TIF director.

 

Launching its "Building a next generation access network for Ireland" report, TIF said that next generation access networks (NGAs) have the potential to drive economic recovery by enhancing the development of Ireland’s smart economy. The report says that Ireland must act quickly to avoid being left behind other countries that are accelerating investment in NGAs. The report also points out that the high cost of deploying the networks in Ireland poses a significant challenge, as a gap exists between the price consumers are prepared to pay for network access and the cost of building the network.

Speaking at the report launch, newly-elected TIF chairman and director of wholesale at eircom, John McKeon said: “Investment in next generation access is crucial for Ireland, and as an industry we are determined to play our role in making this investment a reality. Analysys Mason estimates a cost of €2.5 billion to build an NGA to serve the needs of Ireland’s consumers and businesses. If the investment is to be made, which we believe it must, it is essential that network operators work together with content providers, the Government and Regulator to find a way to reduce and share the costs and risks associated with such a significant investment. We are confident that with such an approach Ireland can, and will, benefit from a world-class next generation network.”

Peter Evans, vice-chairman of TIF’s broadband and NGN industry group and product director at BT, said: “NGAs are likely to consist of multiple network platforms, including fibre to the home/cabinet, cable and 4G wireless. In addition to funding this investment, other challenges that need to be considered are aligning the business strategies of multiple operators in the market, competition challenges, declining revenues and the pace of technological changes.”

Tommy McCabe, director of TIF said: “There is widespread agreement that Ireland needs a state-of-the-art telecoms infrastructure. As a nation we need to be ambitious with regard to what we can achieve as we turn our focus to economic recovery and growth. This TIF report will facilitate an informed dialogue with the key stakeholders in the coming months.”



Proposed waste levies to increase costs for business

John Gormley, the Minister for the Environment, recently announced two important consultations on waste policy and regulation. This follows the publication of the international review of waste policy and a regulatory impact analysis on proposed legislation to increase levies.

The Minister also published for consultation a draft bill for the application of levies to landfills and incinerators. Currently a landfill levy of €30 per tonne applies to each tonne of waste sent to landfill. Under the proposed legislation the maximum levy amount would increase to €120 per tonne. The legislation also proposes the introduction of a waste facility levy on incineration, up to a maximum of €120 per tonne.

The waste subgroup of IBEC's environment policy council is developing a response to the proposed measures and input from members is welcome. The deadline for comments on the landfill and waste facility levy legislation is 31 April.

For further information and comments contact Robert O’Shea at 01-605 1526 or robert.oshea@ibec.ie.



IBEC welcomes innovation taskforce report

The recommendations from the recently launched innovation taskforce report include measures on how Ireland can foster innovation and entrepreneurship and ensuring that investment in science, technology and research translates into high-value jobs and sustainable growth.

IBEC enterprise and innovation executive Aidan Sweeney said: "A number of recommendations are very positive for the business community and will help companies increase their R&D expenditures. These include:

  • improved incentives for the commercialisation of good ideas and new products
  • enhanced taxation initiatives, including the R&D tax credit, business expansion and SEED capital schemes
  • strengthening of the environment for creating and exploiting intellectual property
  • refinements to public procurement policy
  • measures to support increased industry-academic collaboration
  • facilitating serial entrepreneurship
  • a one-stop-shop for funding
  • education reforms
  • measures to attract skills to the country
  • leveraging Ireland’s diaspora network.

"The taskforce recognised that entrepreneurs and enterprise are central to the national innovation ecosystem. The immediate challenge is to ensure that the report’s recommendations are implemented.

"The downturn has reinforced the need to foster an economy built on innovation. This is where much of our economic success has come from in the past and is essential for future growth.

"The recognition that public investment in innovation must be maintained at a high level is key. Such a policy was successfully pursued by Finland in the early 1990s. Investing in innovation will help position Ireland country to take full advantage of the global economic recovery," concluded Mr. Sweeney.

For more information about IBEC’s innovation policy, please contact Aidan Sweeney at 01 - 605 1642 or aidan.sweeney@ibec.ie.



Reminder - new food waste regulations coming into force

The majority of the obligations for producers under new regulations on source segregation of commercial food waste come into force on 1 July 2010. Under these regulations companies must ensure that any food waste they produce is segregated, collected by an authorised waste collector and treated at an authorised facility.

The regulations list 11 different types of premises to which the regulations apply, such as hotels, shops, restaurants and canteens. This is an extensive list and all companies should first check schedule 1 of the regulations to determine whether these new obligations apply.

The Department of the Environment is currently preparing guidelines to assist the implementation of these regulations and questions from members are welcome.

For further information contact Robert O’Shea at robert.oshea@ibec.ie.



International affairs
EU customs initiative will facilitate trade

Single authorisation for simplified procedures (SASP) is an initiative designed to facilitate trade by enabling all customs declarations to be processed in the country of residence, regardless of where in the EU the goods are located at the time of release.

Companies engaged in trade involving multiple EU member states will gain numerous benefits from using SASP. These include reduced administrative burden, a single location for completing customs declaration, more effective use of resources and greater efficiency.

IBEC believes that while the SASP arrangement is a step forward and presents opportunities for Ireland for centralised clearance, there are still some problems with the arrangements, such as the treatment of VAT. To deal with these outstanding issues, draft implementing provisions under the modernised customs code are being discussed at EU level and are due for implementation in mid-2013.

A company is eligible for a cross-border authorisation if they apply one or more of the following customs procedures in more than one EU Member State: customs warehouse; inward processing; processing under customs control; temporary import; outward processing; and free circulation with end-use.

Companies can undertake customs clearance using the simplified procedures within the entire territory of the European Union based on a single authorisation (SASP). For example, an Irish company whose goods are cleared in different EU Member States will be able to declare goods for customs clearance and account for the customs duty at their local office, regardless of in which Member State the goods actually enter the EU. This means that goods imported by an Irish importer from China via Hamburg or Rotterdam could be declared for customs clearance in Ireland.

To gain SASP authorization, a company needs to meet a number of basic conditions and criteria, which are similar to those needed when applying for authorised economic operator (AEO) status. They include a satisfactory system of managing commercial and transport records with good accounting, financial solvency and a good record of customs compliance. Although not mandatory, an AEO certification is useful. It is also important to note that SASP is only available in member countries that have signed the relevant administration agreement.

IBEC will continue to monitor these developments closely. For further information contact Pat Ivory at pat.ivory@ibec.ie or Paula O’Dwyer at paula.odwyer@ibec.ie.



European Commission adopts 2010 work programme

The new EU Commission has presented its first work programme, which outlines its ambitions and commitments for 2010 and the coming years.

The most immediate priority for the Commission is to determine the best way to lead Europe out of the economic crisis, reflected in its centrepiece initiative, "Europe 2020 – a strategy for smart, sustainable and inclusive growth". It will also work to deliver policy from which citizens will benefit directly.

With this in mind, the new Commission states that it will carry out its work based on four main strands including: tackling the crisis and sustaining Europe’s social market economy; building a citizens’ agenda which puts people at the heart of European action; developing an ambitious and coherent external agenda with global outreach; and modernising EU instruments and ways of working.

More specifically, it has agreed on 34 strategic priorities covering areas such as a digital agenda for Europe; a new industrial policy; the relaunch of the single market; and ensuring more stable financial markets, to be agreed by the end of the year. It also includes 280 proposals for consideration in 2010 and beyond.

The new Commission’s work programme is now multiannual and will be reviewed each year allowing for new annual strategic initiatives to be set and for the multi-annual strand to be adapted if necessary. The Commission hopes that this will make its work more predictable and facilitate cooperation with the other institutions.



Spring European Council

EU leaders discussed the EU 2020 economic strategy, financial regulation, the situation in Greece and climate change at the first formal European Council under the new Lisbon Treaty framework, chaired by its new President, Herman Van Rompuy.

EU 2020 strategy for jobs and growth
EU leaders approved the broader elements of the EU 2020 economic strategy based on the Commission proposal for “Europe 2020 – a strategy for smart, sustainable and inclusive growth”. They agreed on a collective EU approach to coordinate economic governance and discussed the possible targets to measure progress. They also discussed how best to tackle poverty and how to improve the competitiveness of Member States.

Financial regulation
The Council agreed that it is necessary to agree on a system of financial supervision for the EU before the G20 meeting in Toronto on 26 and 27 June.

Greece
The 16 leaders of the eurozone countries agreed on a mechanism to help Greece should it request financial aid. This means that if Greece requests support a majority of countries in the eurozone will contribute an amount based on their Gross Domestic Product (GDP) and population. This would be done in cooperation with the International Monetary Fund (IMF) through bilateral loans.

Climate change
The Council reiterated the EU’s commitment to international climate change negotiations and to achieving its emission reduction targets. It said that a new step by step approach is needed and that it would now focus on the strategy for the next round of negotiations from 29 November to 10 December in Cancun.



WTO “stocktaking” ends with collective determination to start building global Doha package

World Trade Organisation (WTO) members will continue to seek a deal in the long-running Doha round, despite significant gaps in positions. However, trade diplomats and officials said that no agreement is likely this year, speaking after key delegations met during a stocktaking exercise in Geneva by all 153 members of the WTO.

“While negotiations will continue, it seems clear that the call by leaders of the G20 and other groupings for a deal in 2010 in agriculture, industrial products and services will go unfulfilled,” said Pat Ivory, IBEC head of trade and transport policy. “One conclusion is that all WTO members need to tackle the major areas still dividing them rather than focusing on complex technical issues as they have been doing in the hope of preparing for a political breakthrough.”

WTO director-general Pascal Lamy told the meeting that negotiations must focus more on substance than process, such as whether discussions are held bilaterally or in large groups. Many members felt too much importance had been put on bilateral contacts between the United States and Brazil, India and China, which the US says must do more to open up their markets to foreign businesses. The main issues of contention remain the size of tariff cuts on manufactured goods from cars to chemicals, calls by the US to eliminate tariffs in some industrial sectors, and the extent to which developed countries open their markets for food and cut trade-distorting farm subsidies. 

Suspension of the round was floated but no WTO member proposed that it had any advantages. Most WTO members still argue in favour of a deal. A study by Jeff Schott and other economists at the Peterson Institute for International Economics in Washington in March 2010 said a Doha deal could boost the world economy by up to $283 billion a year. A new trade deal would also reinforce resistance to protectionism after trade collapsed according to the WTO by 12% last year, the biggest drop since World War Two.

In a more positive development, Michael Punke was officially appointed the Deputy US Trade Representative based in Geneva. Following the US Senate’s failure to approve some of his outstanding nominations, President Obama resorted to making ‘recess appointments’ which involved waiting until Congress was out of session before making appointments. This appointment provides a positive impetus to the WTO as the US has needed a senior and appropriate official in this post for some time now.

A copy of the statement by Pascal Lamy to the WTO Trade Negotiating Committee is available for download here.

For more information contact Pat Ivory at pat.ivory@ibec.ie or Paula O’Dwyer at paula.odwyer@ibec.ie



Social affairs
National skills strategy more important than ever

Commenting on the progress update of the national skills strategy, Tony Donohoe, IBEC head of education and training policy said: "The economic context for the continued implementation of the skills strategy is significantly different from when it was published in 2007. Ironically, the lack of employment opportunities are probably pushing up education retention rates. Nevertheless the overall objectives of the strategy still remain relevant.

"Education and training at all levels of progression have an essential role to play in putting our economy back on a growth path. Economic return from investment in this area tends to accrue mainly in the medium to long term, but it is vital that we treat it as a priority area for investment, even during this time of acute fiscal stress.

"Sustained attention must be also be given to improving the effectiveness of our system and to ensuring excellent outcomes. Ireland will have great difficulty in succeeding in the face of intensifying global competition without a world class education and training system," concluded Mr Donohoe.

The Government announced the objectives of the skills strategy in 2007. The update report finds that:

  • the percentage in the labour force with higher education qualifications has increased from 33% in 2005 to 39% in 2009, compared with the target of 48% by 2020
  • the percentage of people with upper secondary qualifications, including the Leaving Certificate, remained at 40%, compared to the target of 45% by 2020
  • there has been some progress at Junior Certificate level and below. The percentage of the labour force at these levels falling from 27% to 21%; there is some way to go, however, to meet the 2020 target of 7%.

For more information, contact Tony Donohoe at tony.donohoe@ibec.ie.



Industry/education partnership group to support and promote Project Maths

The Project Maths implementation group – an industry/education partnership – has started work on developing proposals on how best stakeholders from business, second level and higher education can work together to improve mathematics standards.

Project Maths is a major programme of reform in second level schools designed to teach mathematics in a way that promotes real understanding, where students can appreciate the relevance of what they are learning and its application to everyday life, and how mathematics can be used to solve problems.

The programme is already being implemented in 24 project schools and will begin in all second level schools in September. Some €5m is being invested in professional development of teachers this year to support the initiative and this will continue on a rolling basis to at least 2013.

The implementation group is chaired by Frank Turpin, former education manager in Intel Ireland and IBEC’s nominee on the National Council for Curriculum and Assessment. The group is focusing on:

  • awareness measures that promote positive attitudes to mathematics and encourage more students to consider careers in this area
  • how the partnership can add value to the teaching and learning approaches and support the curriculum in Project Maths
  • how to best encourage increased take-up of mathematics at higher level.

For further information on the group’s work, contact Tony Donohoe at tony.donohoe@ibec.ie.



Department reorganisation plan is short on detail

IBEC welcomed the reorganisation of responsibilities between government departments announced by the Taoiseach in March as "making sense in policy terms" but warned that the plan is short on operational detail.

The Confederation urged the cabinet to put jobs and economic renewal at the very top of its agenda. It is vital that every government department, whatever its title and remit, plays its part in getting people back to work and restoring our economic fortunes.

The closer integration of the social welfare system and FÁS could provide a better response to the challenge of getting people back to work and is in line with IBEC’s recommendations on labour market reform. In a document submitted to Government in late 2009, the Confederation pointed out that Ireland belongs to the minority of OECD countries where the placement function of the employment service is separated from the social welfare benefit function.

The placement and counselling institutions, currently split across three departments and four funding channels, should be integrated to ensure that employment services have enough resources to engage with unemployed clients systematically and not only with those who self-present.

Moving responsibility for skills development policy to the new Department of Education and Skills could also enhance the enterprise focus of higher education and vocational education committees, which have a crucial role to play in developing the skills of those at work and those looking for a job. It should also break-down the artificial and archaic distinction between "education" and "skills".

The main concern with this change, however, is with the ability of a department that has traditionally been criticised for being overly ‘school-focused’ to handle an even broader and more complex remit.

The streamlining of research programmes through the new Department of Enterprise, Trade and Innovation is potentially positive. However, it is more critical that the government delivers on the investment framework set out in the Strategy for Science, Technology and Innovation and that there is no further reduction in overall research funding.

The real challenge is converting public investment in research into commercialised products and services that will ultimately contribute to economic growth and employment.

For more information, contact Tony Donohoe at tony.donohoe@ibec.ie.



See Change – ending the stigma around mental health

See Change, Ireland's national campaign to reduce stigma associated with mental ill health, was launched on 15 April. It is an alliance of organisations working together through the national stigma reduction partnership to bring about a positive change in public attitudes and behaviour towards people with mental health problems.

See Change includes a range of organisations, including voluntary and sporting bodies, civil society groups, unions and state agencies and departments. IBEC recognises the importance of this campaign and has played an active part.

The first stage of the campaign is a competition open to all to provide ideas on how best to drive the message forward. Entries can be slogans or campaign ideas. Find more information at www.seechange.ie

IBEC will run a number of event over the course of the campaign. If you would like further information please do not hesitate to contact Alan O’Kelly at alan.okelly@ibec.ie.



Editorial
Welcome to IBEC Agenda - April 2010