Comments by Minister Michael Ahern at the Ireland-Spain Economic Association Annual Lunch

On Thursday, 13 ^th October 2005.

Ambassador, Ladies and Gentlemen

I was very pleased to receive your kind invitation to attend the Association’s annual lunch here today. I welcome the opportunity to meet with representatives of the Spanish business community based here in Ireland and also their Irish partners involved with promoting trade between our two countries.

I am aware that the Ireland-Spain Economic Association has been active since 1989 promoting business relationships between Ireland and Spain and over the years has built up a network of business contacts facilitating closer economic cooperation between our two countries.

One of the highlights of the ISEA’s promotional activities is the Association’s annual award to the company which has made the most significant contribution to the development of trade between Ireland and Spain - and I was very pleased to see that this year the award went to Aer Lingus.

As fully participating members of the European Union, both countries have reaped the advantages in terms of cultural and commercial exchanges, and this has facilitated even greater cooperation at business and personal level between our two peoples. In recent years, Ireland has become a popular venue for young Spanish students intent on improving their English language skills - approximately forty thousand of them - and many dedicated schools have been established by Spanish educational institutes in Ireland.

Today, we acknowledge the work of the Ireland-Spain Economic Association in furthering the bonds between our two countries by building on the business linkages and joint ventures which already exist. Spain is an important market for us. It is now the 5^th largest economy in the EU and accounts for almost 8% of the EU’s GDP and 9% of its population. The level of trade between our two countries is significant. In 2004, Spain was Ireland’s 11^th largest trading partner, 9^th largest export market, and 16^th largest import market. Bilateral trade between Ireland and Spain stood at €3 billion in 2004, with exports to Spain at €2.43 billion and imports from Spain at €658 million.

As an island economy with a small domestic market, Ireland is heavily dependant on exporting and the EU now accounts for 62% of all Irish exports. Indeed, OECD figures show that Ireland is now one of the most open trading economies in the world. Since 1973, when Ireland joined the EEC, our total exports of goods and services have increased from under €2 billion a year to over €100 billion now. The creation of a single ‘home’ market, from 1992, of 380 million consumers – which has now expanded to 455 million – has thus been fundamental to the exponential growth and diversification of our trade.

In economic terms, Ireland and Spain have experienced a broadly similar pattern of economic development. Both of our countries were essentially underdeveloped, agricultural economies and both have transformed themselves into dynamic, industrial export-led countries as a result of imaginative and vigorous government policies in encouraging inward investment, stimulating native enterprise, investing heavily in education and training and pursuing free trade policies. The average growth in Ireland’s economy during the most recent five-year period 1998-2002 was 8.4%, which exceeded that of the EU and the OECD by a factor of 3.5. It is no coincidence that the next best EU performer in that period was Spain.

Spain has a population that is more than ten times that of Ireland but, like us, you realised that the domestic market was too small to achieve sustained economic growth and looked outward - to what is now the home market of the European Union, as well as to the larger global marketplace.

Spain is increasingly seen as an attractive market for Irish companies. Over twenty indigenous Irish companies now have a market presence in Spain and over fifty indigenous companies export to Spain. There are many reasons for this, including the country’s highly developed infrastructure, increasing spend on R&D, and its leadership in a wide variety of industries, such as telecommunications, banking and aviation. It is also very attractive as a gateway to Latin America, where Spain has strong investments in many sectors, such as utilities and financial services.

There is a strong Irish community in Spain, both in urban and coastal areas and, as I said earlier, there is also an increasing Spanish population in Ireland. This is indicative of our shared values, such as the belief in the importance of developing relationships for business, as demonstrated by your attendance here today. I have no doubt that there are significant opportunities for greater partnership between Ireland and Spain and, through the Ireland-Spain Economic Association, we show our commitment to further developing these opportunities in the years ahead.

Thank you.

ENDS/TC 180