Opening speech for Minister Roche at the 22nd Russian Bankers Conference on 'Transition to the Market Economy: (2)

Taking my EU Presidency hat off for a moment, I would like to say a few words about Ireland's bilateral economic relations with Russia. Total trade between our two countries has grown steadily, from nearly €190 million in 2000 to over €290 million in 2003. The Russian market offers excellent opportunities for Irish exporters indeed, Russia is the largest market for Irish beef after the UK. The Irish business community recognises the potential for further developing two-way trade and business links between our two countries. Ireland would welcome investment by Russian companies in Ireland and I hope this will become a feature of our economic links in the future.

I know that my colleague Brian Cowen, the Minister for Foreign Affairs, had an opportunity to discuss Ireland-Russia bilateral trade last week with the Russian Foreign Minister, Sergey Lavrov. Minister Lavrov also told Minister Cowen about governmental reforms in Russia which are aimed at a simpler regulatory framework (especially tax reform) which will foster greater economic growth. Competitiveness is a key concept for Russia, just as it has been for Ireland for many years now.

In the EU context, we are also conscious of the need for regulatory reform to sustain prosperity. The 2003 European Commission Review of the EU economy pointed out that regulatory reform is key element in achieving the goals of the EU's Lisbon strategy on competitiveness. The IMF view is that improvements in the EU regulatory framework could deliver as much as a 7 % increase in GDP and a 3 % increase in productivity in the longer term.

This month, as part of our Presidency, Ireland is hosting an expert seminar on the contribution of Better Regulation to competitiveness and economic performance. We will be happy to share the results of this seminar with the Russian authorities. The Netherlands will, during its own presidency, organise a high level conference on 'better regulation', with particular attention to elements of the Action Plan such as the simplification programme.

Ireland's membership of the EU has been crucial to our economic development, and to our economic and trade relations with partners such as Russia. The economic benefits to Ireland of our EU membership, direct and indirect, have been enormous. European Union membership has enhanced our national independence, led to intensive EU investment in our country, and provided free market access to over 25 markets in Europe. The Euro has brought low interest rates and economic stability to businesses based in Ireland. So much new investment foreign and domestic would not have taken place, so many new jobs would not have been created, had we not been an integral part of a large single market and of a powerful trading bloc.

But the impact of EU membership goes well beyond economics. Membership has helped to broaden our horizons and modernise our society. It has helped to make our identity and our culture more self-confident and outward-looking, without obliging us to sacrifice what is essential and unique. And being at the heart of the EU has added a new dimension to our relationships with other partners, including with Russia.

Business people have been strong supporters of economic reform focused on openness to the world economy, free trade and investment in social services and education. As Minister for European Affairs, I would also underline the critical role played by the Government foreign policy and economic policy in the changes that have come in Ireland in recent years.

In over thirty years of EU membership we have focussed on:

- Implementing sound financial management within an EU framework - Developing policies to promote foreign direct investment and research and development - Very high levels of investment in education - Providing low, fair tax rates yielding the highest tax takes ever - Developing a serious engagement with the European Union.

The benefits of that approach can be seen in the rapid, sustained expansion of the Irish economy since the 1990s. But the chief and enduring effect lies in the new enterprise culture we now have. At the heart of that new spirit is an awareness of the part we can play as a modern European state and a great commitment and ambition of ordinary Irish people to the work to keep this small economy competitive, prosperous and secure at the heart of a Europe without dividing lines.

Turning to the subject of today's conference, I am sure we can agree that financial services are a truly global industry. In our experience here in Ireland, financial services has been one of the engines of the transformative economic growth of the last ten years. Financial services now accounting for over 5% of GDP employ over 50% people and expanding employment by over 70% in the last decade. The Irish Financial Services Centre is one of the greatest Irish success stories of our engagement with the European Union and an example of the transition which has taken place here.

Of course, key challenges lie ahead for Ireland and for Europe. We won't meet those challenges by forgetting the lessons of the past, by closing ourselves off from the outside world, but we will meet them if we resolve to act in the belief that as Europeans we need to work together better, we can work together better and that Russia and the European Union governments and businesses all stand to win if we do.

Ireland's Ambassador to Russia, Justin Harman, will be expanding further on the points that I have made. I wish this conference well in its work.

Thank you.

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