PARNELL SUMMER SCHOOL:IT IS "inevitable that interest rates will fall . . . one hopes not too late", Sir Anthony O'Reilly has claimed at a summer school. He expected the European Central Bank would cut rates by the end of the year.
“However, the real problem is not the cost of money, so much as the availability of it,” he added. Bankers had learned to distrust each other, and “all our futures as countries may well hinge” on the simple question, “will banks lend to each other and to new and old customers?”
The chairman of Independent News Media was speaking at the opening of the Parnell summer school in Avondale House, Co Wicklow, yesterday.
“We are at a daunting economic crossroads, domestically and worldwide, albeit at levels of prosperity we deemed impossible 20 or 30 years ago, so the question facing the Government and the country is ‘Quo Vadis?’
“The drama of the Freddie Mac and Fannie Mae in the US, the two gigantic mortgage lenders; the enormous crisis in the banking system which has led to write-offs in excess of $250 billion in the capital of major banks in the US to date – it has made a dramatic impact upon the psychology of Americans and the capacity of its banking system to rally to the needs of America and of the world.Similar problems abound in Europe and in Ireland,” he said.
He continued that “Ireland is now, thanks to its tax status in Europe and thanks to foreign direct investment of around €1.5 billion over the last 10 years, home to a ‘twin track economy’ ”. Ireland “had no real export base before”, he said, noting that pharmaceutical exports were valued at €40 billion compared to €5 billion for agricultural produce.
“Companies such as Pfizer, Google, Dell, Microsoft and Intel, our financial services centres, the eight pharmaceutical giants ranging from Wyeth to Merck Sharp Dohme, and my former company, Heinz, are all residents, manufacturing in Ireland for foreign markets.
“The good news is that exports are up by 4.4 per cent this year, and these companies are largely unaffected by domestic sales, though they are affected by world demand. They will sustain a level of economic activity which was not present in past times, when emigration was the sole refuge of so many people, and which is, I think, locked in the folk memory of a great many of us in this room.” He commented that of his own UCD graduating class of 1958, 86 per cent had emigrated.
Describing Parnell as “certainly the greatest man of his time”, he wondered, had he succeeded, “would the Ireland of today be a better country than that which we have achieved by our partition, our fractures, the bloodshed and the qualified reconciliation that we currently enjoy, particularly in the context of a European community?”
