Keynote address by Minister Donohoe to the IIEA: The Future of the Global Economy: US and Irish Perspectives

Check Against Delivery

Good afternoon everyone.

It is a particular honour to introduce Dr Janet Yellen, U.S. Secretary of the Treasury.

This is Secretary Yellen’s first visit to Ireland, and on behalf of the Government, I am delighted to welcome her to Dublin.

My thanks to Michael [Collins] and Dan [O’Brien] and all the team at the Institute of International and European Affairs and to Dublin Castle for hosting us today.

I look forward to having the opportunity to hear from Secretary Yellen in just a few moments. But first, I would like to offer a few introductory remarks for this special occasion.

Achievements

I have had the pleasure of working with Secretary Yellen over recent months, within the G7 in my capacity as President of the Eurogroup, as well as within the OECD’s Inclusive Framework.

In what has only been a relatively short nine months since she took office, I have seen just how instrumental Secretary Yellen has been in leading a much-needed revival of principles-based international economic diplomacy.

This approach is delivering real results.

We have a landmark agreement to reform international corporate taxation.

We have agreed the rapid establishment of long-term emergency financing to small island states and vulnerable low- and middle-income countries that have been particularly impacted by the Covid-19 pandemic.

We have increased our commitments and our collective ambition to ensure we meet net zero targets under the Paris Agreement.

And we have a new coordinated approach to address the threat posed by ransomware to our financial systems and other critical infrastructure.

In short – President Biden’s commitment to ‘Build Back Better’ is a global call to action, and Secretary Yellen is helping deliver on that commitment.

A Commitment to Multilateralism

The Secretary, as you all know, is a renowned economist who carried out her doctoral dissertation at Yale under the supervision of Nobel laureate Professor James Tobin – a close advisor to President John F. Kennedy.

Writing about economics, Professor Tobin said that periods of division are generally followed by periods of synthesis and consolidation from which the economic science emerges stronger.

I see in Secretary Yellen’s international engagement a principled commitment to deliver such synthesis and consolidation and reject policies that would further fragment the world economy. It is up to the international community to reciprocate in good faith. The rest of us cannot step back.

Equally, if we seek to move forward together then we must continue to reach compromises that will enable all countries to share in the benefits of broad-based prosperity that delivers both social and environmental progress. And we must actively translate multilateral commitments into practical results that deliver for our societies.

We renew this commitment at a historical juncture. History reminds us that the eras after pandemics are points of great change. Our world, the United States of America, the European Union and Ireland, approach this moment with other dynamics for great change accelerating. The Climate Crisis, new possibilities and new challenges created by technology suggest that our time will be one of extraordinary change.

We must approach this moment together. Working in unity might not always provide a detailed map, but it is the best compass to guide us through this time.

It is important to be equally clear that multilateralism, whether it be within the European Union or across the Atlantic, is not about the absence of national interests, it is about the tone of how we pursue them and realising that the most important priorities are best achieved if we pursue them together.

Reinforcing the transatlantic economy

Secretary Yellen, I remember distinctly during our first call on St Patrick’s Day earlier this year when you told me that your focus would be on addressing the issues facing families and communities that have fallen on hard times.

President Biden has noted how his ‘Build Back Better World’ initiative has echoes to the hallmarks of the New Deal.

Indeed, the international component of the New Deal consensus led to the Marshall Plan and US support for the establishment of the European Economic Community – which would evolve into today’s European Union.

The U.S.-EU transatlantic partnership has long been a pillar of the global economy and has, in my view, the potential to show leadership in addressing the major issues facing our societies, whether it be climate change, international tax reform, or delivering on international development commitments.

While it is natural that the EU and the US will have different views, the key to addressing such differences is through dialogue and compromise.

Secretary Yellen very graciously accepted my invitation as President of Eurogroup to appear at our meeting in Brussels in July for a discussion on economic and financial matters.

I think it is fair to say that we had a rich exchange of views with extraordinary levels of interest throughout the session and we certainly benefited from your insights.

I believe that continued structured engagement will help to reinvigorate transatlantic economic relations. To paraphrase Jean Monnet – an architect of European integration and a committed transatlanticist – nothing is possible without human initiative, but nothing can be enduring without institutions.

In this regard, I very much welcome the establishment of the EU-U.S. Trade and Technology Council, which held its first meeting in Pittsburgh in September. In the period ahead, we should reflect on how to build the transatlantic economic architecture of the future.

Next year I hope that the Eurogroup can play our part in deepening this relationship given the success of our first political dialogue with Secretary Yellen.

OECD tax agreement

The recent agreement in the OECD’s Inclusive Framework to reform international corporate taxation is an emblematic example of a renewal of economic diplomacy and multilateralism.

This is a once-in-a-generation agreement and the capstone to a process of international tax reform that began almost a decade ago.

The leadership shown by Secretary Yellen since taking office was instrumental in brokering a fair and balanced agreement for the interests of all.

I stated on the 7th of October, that joining this agreement is an important decision for the next stage of Ireland’s industrial policy. It is important that Ireland is part of the solution in respect to the future international tax framework – one that will provide the conditions for long-term certainty for business and investors to the benefit of the many thousands of employees across Ireland.

The decision with regard to our corporate tax rate for the largest of companies was an immensely important decision.

It was, and will be, the right decision.

Our tax policy will remain stable and competitive. It is now part of a broader economic model – our membership of the European Union and Single Market, the quality of our education and the skills and innovation of workers in Ireland.

It was the right decision for other reasons too.

Ireland must be part of global and European efforts to respond to complex challenges that all countries face, as we work together with multiple and historic rhythms of change converging in our time.

Our values, our heritage and our future means that Ireland should be influencing, shaping and inside international agreements. Not outside of them.

We are better in - not out.

To make good on our multilateral commitment to provide stability and certainty in the international tax framework, we must ensure that implementation respects both the letter and the spirit of the agreement.

Overall, I believe this agreement will bring long-term stability and certainty to the international tax framework, and I thank Secretary Yellen for her engagement on this issue.

Secretary, we had a number of bilateral meetings on this issue, and I want to thank you for the understanding and interest you showed me in listening to Ireland’s position on international tax reform.

Recognising US support in Ireland’s Decade of Centenaries

It is also fitting that your visit to Ireland coincides with Ireland’s centennial commemoration of our independence as a nation.

All the more fitting to be here in Dublin Castle – the location of the hand-over of power from the British Government to the new State.

While that process has not been a linear one, and has been at times troubled by violence and periods of economic hardship, the United States has always stood by Ireland as a friend and partner, particularly in its unwavering support for the Good Friday Agreement.

The United States has also been a major partner in Ireland’s economic development. The power of our people-to-people ties has been a significant factor in this regard.

Today, many US businesses have made Ireland their home. A large number have been here for many decades and are significant employers, providing good and stable jobs for Irish workers.

I am also excited to see companies like Stripe that are born as start-ups in Ireland, and grow and thrive in America.

The Irish Government of Ireland will continue to pursue policies that make our country a very attractive location for American and international investment.

Conclusion

If I may conclude by offering a personal reflection.

To quote again from Professor Tobin, who asked the question: Do policy makers have the knowledge and ability to improve macroeconomic outcomes, rather than make matters worse?

In your case, Madam Secretary, the answer is most definitively yes.

I have appreciated working with you since you took office, and I very much look forward to engaging as we deliver on other common interests and shared objectives, both in terms of our EU-US transatlantic partnership as well as in international fora.

Your visit to Ireland affords us the opportunity to reflect on the strength of our people-to-people connections of both affinity and ancestry. We are fortunate to have built such strong mutual ties of commerce, investment and culture.

I have every confidence that these connections will grow from strength to strength in the years ahead. We will build on these connections and we will use them to guide us through our era of change.

It is now my privilege to invite the United States Secretary of the Treasury, Dr Janet Yellen to speak.

ENDS