Minister Burton interviewed by Myles Dungan on the The Pat Kenny Show (Tuesday 7th August)
Minister for Social Protection Joan Burton discusses the issues pertinent to her department.
Minister Joan Burton interviewed in April’s VIP magazine
Inside Wall Street: Irish stocks are smiling
By Gene Marcial 19/3/12
With St. Patrick’s Day just behind us, what’s a better and more propitious time to talk about investing in Ireland? I spoke on Friday with Joan Burton, Minister for Social Protection and Deputy Leader of the Irish Labour Party, who was visiting New York to help celebrate the most globally popular Irish holiday.
I had a very informative and refreshing interview as she updated me on the positive change that apparently is taking place in Ireland, amid the messy financial conditions in some countries in Europe — and in spite of continuing fears among worried and less-informed investors about Ireland’s developing situation.
”Ireland is back, and investing now in Ireland would be a very timely idea, and should definitely produce rewards over the long run,” says Minister Burton, who was the Finance spokesperson for the Labour Party up to 2011. A trained CPA, the minister worked for PriceWaterhouse in Dublin before starting her electoral political career. She was elected to the Irish Parliament a number of times before her appointment to the Cabinet.
She attests with confidence that economic conditions in the country are already starting to improve, with new orders for Ireland’s goods and business activity beginning to noticeably increase. Minister Burton also points to “Ireland’s enduring attractiveness as a destination for foreign direct investment, underpinned by our 12.5% corporate tax rate.” While it may be premature to claim that Ireland has been reborn, early indications suggest the country is on the road to economic recovery, says Burton.
As in any type of investing, the largest returns are usually realized by those who step up before all of the stars have aligned. So Burton strongly suggests that U.S. investors as well as American companies should put some of their investment money in Ireland for the simple reason that “we are confident that our mandate to implement measures for reform and recovery will succeed.”
Information technology, education, healthcare, and real estate are among the sectors of the economy representing the best investment opportunities right now in Ireland, says the Minister. At the same time, she is also encouraged by the increased interest in the areas of financial services, digital media, gaming, and pharmaceuticals, as the government has adopted measures to boost these industries.
She notes that President Barack Obama and former President Bill Clinton have been upbeat about opportunities in Ireland and have expressed support for the nation’s turnaround. Bill Clinton, in a speech before a public forum not too long ago, understood and underscored the idea that Ireland wants investments, not a bailout.
”Now is the time to invest in Ireland, where property is a steal,” said Clinton. “You’ve (Ireland) got the best educated workforce in the world,” he noted. Burton says President Obama, Bill Clinton and others who have expressed support for investing in Ireland are aware of the improving economic scenario in the country, even as virtually the rest of Europe is mired in multifold problems and economic stagnation. Ireland has appealed to a group of investors pulled together by the William J. Clinton Foundation to consider the opportunities in Ireland.
”We definitely are turning the corner,” says Minister Burton, with the country and its government exceeding their targets for a faster and well-rounded economic recovery, she adds.
For investors seeking an investment play on Ireland, some analysts recommend betting on the ETF iShares MSCI Ireland Capped Investable Market Index Fund (EIRL -0.68%). The ETF tracks the price performance of underlying holdings in the MSCI Ireland Investable Market 25/50 index. This index measures the performance of stocks in the top 99% by market capitalization of the equity securities listed on stock exchanges in Ireland.
So far, the Ireland ETF is the only major game in town on investing in Ireland’s securities. PowerShares and State Street Global Advisors have registered ETFs consisting of stocks traded in Ireland, but they have yet to be launched.
Shares of EIRL have been on an upswing despite the European financial mess, trading at $23.58 a share, very close to their 52-week high of $23.80, and way above is 52-week low of $16.76. Right now, most analysts are down on ETFs related to Europe, but that is why the opportunity to make big bucks in iShares Ireland ETF is potentially huge, according to the Irish bulls. The ETF is invested in many sectors of Ireland’s economy, including technology, pharmaceuticals, real estate, and educational services.
Minister Burton points out that the reason why Ireland is such a good buy now is that it isn’t one of the nations in Europe that are vulnerable to economic disaster. It shouldn’t be lumped together with such strapped and troubled countries as Greece, Portugal, Spain and Italy. “We have learned from our earlier mistakes, and we have, for example, strengthened our banking system and refined government regulations,” she says.
So for investors seeking to take advantage of hidden opportunities in Europe, Ireland stands out as among the best bets in that financially challenged part of the world.
Gene Marcial wrote the column, “Inside Wall Street” for Business Week for 28 years and now writes for MSN Money’s Top Stocks. He also wrote the book “Seven Commandments of Stock Investing,” published by FT Press.
When Irish Eyes Are Hopeful
March 17, 2012
By Brian Bremner
As Dubliners and New Yorkers were preparing to head into the pubs to tip back a pint or two in honor of St. Patrick’s Day, Irish Cabinet Minister Joan Burton was in Manhattan on March 16 to deliver an optimistic message about the economic prospects for an Irish economy that ran off the rails in 2008. As Irish Prime Minister Enda Kenny’s Social Protection Minister, Burton’s job is to figure out ways to lower the country’s painful 14.2 percent jobless rate, just as the government is under international pressure to cut spending.
Two years ago, Ireland received a $67.5 billion bailout package from European governments and the International Monetary Fund. Ireland’s banking system has stabilized for the most part, but the country is still coping with a budget deficit clocking about 10 percent of gross domestic product and the government is likely to cut its 1.3 percent growth forecast for 2012. On top of that, Kenny’s government will soon hold a Yes-No referendum on the European Union’s new fiscal treaty, which mandates tight deficit rules. If Ireland votes No, the country would be cut off from any additional support from the euro zone’s bailout fund-a worrisome scenario because the economy may yet need more financial help.
Burton took a break from the St. Patrick’s Day festivities at a Midtown Manhattan restaurant to discuss Ireland’s crucial referendum vote and the outlook for the economy.
Here are the edited excerpts:
When will your government schedule the referendum on the fiscal treaty, and are you
confident voters will sign off on this?
There have been two major polls showing support. But I should caution that referenda in Ireland are very difficult to call. People understand this is a big issue and will contemplate the vote seriously. As for the timing, it will be late May or early June-or late June or early July. We need to have this vote by October. (Ireland’s school-entrance exams are held in mid-June.)
If voters say No, what are your thoughts on Ireland remaining in the euro over the long term?
A Yes vote will secure Ireland’s future in the euro zone. The EU has had an enormous positive impact on Ireland. As for the debt treaty, we are already doing a lot of heavy lifting (on fiscal policy). The IMF and other regulators check our revenue returns on a daily and weekly basis. At the end of every quarter, a team arrives and goes over our books in great detail.
Ireland’s bank sector is no longer in crisis, but there’s talk of rescheduling the payments of promissory notes used to bail out two banks, including the former Anglo Irish Bank. Is that doable?
The promissory notes were created in a period before the debt crisis in Europe. It’s very expensive and onerous. The former government thought the situation was going to turn around. One problem we face is that we still don’t have the flow of credit from the banks to local business.
The IMF has called for welfare-spending reform in Ireland. How have you responded?
The Irish system has been rather passive, and the IMF has offered sensible advice. We launched a new structure called Pathway to Work. The day you start receiving assistance is the day we start helping you get back to work. We want to be not just a cushion, but also a trampoline.
Is the worst over for the Irish economy?
If the European debt crisis continues to stabilize, we should be moving into a recovery stage. We have had the equivalent of a 16 percent internal devaluation and our economy is now very, very competitive. We have cut wages and increased taxes. Real estate prices have fallen. We have an attractive corporate tax rate. We are more competitive than we were five years ago.
Bremner is an assistant managing editor for Bloomberg Businessweek.
Sunday March 4th 2012
Joan Burton: Voting No would be a reckless gamble for us
They say truth is the first casualty of war. Experience tells us that truth is also a casualty of febrile political campaigns and that is particularly true of European referendum campaigns in Ireland.
Well, here is one inconvenient truth that will be as valid the day after the referendum count as the day before, no matter what the result is.
Ireland is presently borrowing €50m a day. That cannot go on indefinitely. It can’t even go on at the same rate in the short term. Voters have to decide if they want Ireland to have continuing (though conditional) access to European funds while we work our way through the tax changes and spending cuts to eliminate this deficit and restore our independent capacity to fund ourselves in the longer term or not.
I know that we will experience a barrage of posters that will urge us to vote No to austerity as if voting No could magically halt the austerity juggernaut in its tracks. If we vote No, we will not have access to the European Stability Mechanism, which provides a helpful backstop in the form of an additional line of credit. In the absence of access to such a credit line, we would have to move even more rapidly into a balanced budget situation involving adjustments far in excess of the tumultuous budgets of recent years.
This leaves voters this year in a classic Catch 22 paradox. A Yes vote gives us a reasonable guarantee of access to funds albeit under strict supervision by the troika. A No vote may give the semblance of independence but it will require Ireland to negotiate emergency funds that will have identical — if not even more onerous — scrutiny provisos.
There is no escape, one way or the other, from fiscal restraint in our present situation. There is no honest realistic choice in front of voters this year that offers an easy escape from unpalatable budgetary measures. To pretend otherwise just leads the country straight into a cul de sac.
I visited a Jobs Fair in Blanchardstown on Friday attended by local, national and international companies including PayPal, HP Ireland, eBay and Symantec. I know that when these and other companies set up here in Ireland it is because they believe they are in a country that is wholly committed to the European Union. We have punched well above our weight when it comes to attracting foreign direct investment here and I believe that voting Yes to the Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union will show that Ireland is willing to play its part in building a more financially stable European Union.
To vote No would profoundly damage our relations with countries and institutions that want Ireland off the watch list of endangered economies. It would bewilder American companies that are planning their European investments. It would leave China extraordinarily perplexed as to what Ireland’s intentions are just at the time when we are making a breakthrough in that enormous but difficult market.
There is a mighty advantage of staying the course with Europe. The signals from every corner of Europe is that collective action to boost growth and investment offers a much better prospect to restore the health of national budgets than sole reliance on austerity. Our previous experience of such joint European action through the Regional and Social funds was entirely positive.
A new programme of European action would recognise a variety of ways where growth can be stimulated by collective action in ways that individual debt-strangled countries like ours cannot do alone. Such a pro-growth agenda should incorporate initiatives to relieve the cost of bank rescues, a particularly onerous burden on Ireland but a vital ingredient in a general mix to assist, for example, Spain to break out of imminent recession.
Bank debt is not exclusively an Irish issue. The arrival of Mario Draghi at the head of the ECB has significantly changed many aspects of that institution’s attitude. There is a lot more to be done to help beleaguered countries. I believe we are far better off making that case along with like-minded governments inside the European tent than being a lone voice on Europe’s periphery.
As we have established in the course of the past 12 months, reputation means everything in the modern world. Political scientists call it soft power. It is the capacity to influence events and policies in the wider world that arises from the respect that is earned by national efforts and sacrifices to overcome a crisis.
This Government has put painstaking effort into rebuilding Ireland’s reputational capital in Europe, in the USA and the emerging global powerhouse that is China. There are some indications that this effort is bearing fruit, notably in the confirmation by leading international companies that Ireland continues to be as much a magnet for inward investment as it was a decade ago.
A No vote would upend that process overnight. Countries don’t have friends, they have interests. That is particularly true of a small country that has successfully chosen to base its development and prosperity on being a trading nation. It is in our interest to be inside every European Council, committed to national budget discipline as one significant — but far from exclusive — part of a strategy to promote growth and job security in every corner of Europe. It is entirely contrary to our interests to take a reckless gamble now that would leave Ireland isolated, perplex our friends and exasperate those who are currently funding our State till we restore our capacity to do so ourselves.
Joan Burton is the Minister for Social Protection and a Labour TD for Dublin West