Europe will stand together in any confrontation with President Donald Trump’s administration, including on US pharmaceutical companies in Ireland, Minister for Finance Paschal Donohoe has said.
Speaking in Berlin on Thursday, Mr Donohoe, who is also president of the Eurogroup, welcomed plans by Germany to borrow and invest at least €1 trillion in defence and infrastructure projects – a deal being debated blocks away in the Bundestag, Germany’s parliament.
“We are not alone in Europe in having a particular national sector of our economy that could be seriously impacted by a trade war between Europe and US,” he said. “The best way of reducing those risks and [the] best way of having a strong approach to this trade negotiation is that countries of Europe do it collectively through the EU.”
Similar to Ireland’s pharmaceuticals sector, Mr Donohoe said “many other parts of Europe have been successful in deepening investment they have and building up clusters of excellence in manufacturing and services”.
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Mr Donohoe said that, though any investment decisions rested with US companies, he was confident they would not walk away from their long-term investment in Irish plants and staff.
Ireland has contributed to their successful new drugs and “played an important role in the global success of these companies”, he said.
Despite his optimistic message, however, Mr Donohoe said transatlantic trade uncertainty underlined the case for running budget surpluses in recent years to top up Ireland’s rainy day fund.
“We are ready for moments when the corporate tax revenue could change in the future,” he said.
Mr Donohoe said it was similar thinking on balanced budgets in Germany that gave it the fiscal flexibility now, in a time of growing challenges, to make big investments in defence and infrastructure that would benefit all of Europe.
“We hope and need Germany not just to again be a leader wtihin Europe but a leader within our world,” he said.
In a keynote address at the Hertie School of Governance, Mr Donohoe said that, though an optimist by nature, he believed the “power of necessity” in times of crisis would expedite progress in key European projects including capital market reform.
He was less optimistic on banking union, however, noting his “lengthy experience” of German opposition to a common deposit insurance scheme in his 11 years of visiting Berlin.
Ahead of a meeting with Germany’s acting federal finance minister, Jörg Kukies, Mr Donohoe said: “If we were able to progress this element of banking union it can only help with the bigger projects that Germany is trying to deliver in Europe on how we are to become more competitive.”
Regardless of the future of US pharmaceutical companies here, Mr Donohoe said Ireland was prepared to step up its financial commitment – at national level and through the EU – to help fill some of the gap left by the end of USAid-funded HIV medication to many African countries.
“We don’t want the casualties of a change in the global consensus on trade and co-operation,” he said, “to be those who are the most vulnerable.”
