Brexit presents an opportunity for Ireland to win foreign direct investment (FDI) that would otherwise have gone to the UK, according to IDA boss Martin Shanahan.
However, UBS chairman Axel Weber, formerly the head of Germany’s Central Bank, warned the World Economic Forum that a no-deal Brexit would have “real spillovers” for the global economy.
“An unmitigated, uncontrolled Brexit is the worst outcome we could imagine. Nobody wants this kind of tail-risk,” he said.
Speaking about the uncertainty surrounding the UK, Mr Shanahan said companies were more likely to look further afield.
“We are the market for mobile investment. So if multinationals decide that they need a footprint within the remaining 27, we are in the business of making sure that Ireland is the beneficiary of that,” Mr Shanahan said.
He added that he didn’t think this could be characterised as stealing business away from the UK. “All investment that comes into Europe, Ireland is pitching for. We make no apologies for the fact that we are pitching for what is mobile investment.”
Mr Shanahan said he’d take part in around 25 meetings and events at Davos as he seeks to win FDI.
“Part of our message is clearly that Ireland is stable, and that they can be confident investing in Ireland. To be honest with you, investors believe Ireland is a very stable environment.”
But he added that the atmosphere around Davos was more subdued this year compared to last. “I think there is more caution. There’s a raft of geopolitical uncertainty around and companies are looking at that, trying to make sense of it, figure it out and see what impacts it will have on them.”
He said there’s a possibility global FDI will decrease this year, and if that’s the case then the IDA will have to work harder to maintain the current level of investment.
It is also set to host its annual dinner at the event, with Taoiseach Leo Varadkar, Finance Minister Paschal Donohoe and representatives from a host of major companies attending.
The major story at the event yesterday was the state of China’s slowing economy.
However, the slowdown won’t be a disaster, the vice-chairman of the China Securities Regulatory Commission said.
Fang Xinghai said that the country’s macro-economic policy was “very responsible and very data-dependent”.
“On fiscal policy there is room to expand. The government sector can still leverage a lot.”
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