EU/IRELAND: Taoiseach Bertie Ahern has told EU leaders that European rules on state aid must be changed to prevent investments such as Intel's €1.6 billion expansion of its Leixlip plant in Dublin from moving to India or China.
Mr Ahern told a summit that the EU needed to take competition from outside Europe more seriously if European economies are not to suffer.
"The European Union now competes directly with other regions in the world for mobile investment and knowledge and research, and the state aids regime has to take account of this to ensure that European countries are not at a disadvantage when it comes to competing for investment. We must not become so inward-looking that we lose sight of the bigger picture."
The Government last month withdrew a proposal to give Intel up to €100 million in investment aid for the Leixlip project after the commission made clear it believed the grant would be in breach of EU rules on state aid.
The commission is due to draw up new state aid rules later this year and the Government is pressing for the guidelines to be more flexible where inward investment is concerned.
"We think that the European Union needs a bigger state aids regime, but the rules should not be framed in such a way as to leave EU members at a disadvantage when it comes to competing for investment," Mr Ahern said.
While the Taoiseach declined to speculate on the motive behind the commission's opposition to the Intel scheme, Turlough O'Sullivan of Ibec suggested this week it may have been rooted in envy of Irish economic success.
Mr Ahern acknowledged, however, that Ireland took a large share of Europe's foreign direct investment in information technology, the pharmaceutical and medical area.
"With 1 per cent of the population, we are taking an enormously disproportionate effort . . . "