Kitt tells French EU structural funds and emphasis on technology helped shape Irish ' economic miracle'

If Tom Kitt isn't careful, he is going to make the French very jealous

If Tom Kitt isn't careful, he is going to make the French very jealous. Ireland's Minister of State for trade and employment spent the day before the France-Ireland rugby match telling French journalists (at breakfast) and the Franco-Irish Chamber of Commerce (over lunch) about the Irish economic miracle, writes Lara Marlowe, in Paris.

"Ireland is the world's largest exporter of software, and young people from all over Europe, including France, work in Ireland's main cities," he said. Irish exports to France rose to more than €5 billion last year - compared to a paltry €2.7 billion in the other direction.

Mr Kitt attributed Ireland's success to the vast EU "home" market, EU structural funds, a young, well-educated population and the decision to focus on engineering and information technology in Irish universities. Lest the French journalists doubt it, each was given an electronic contraption that tells time in 16 cities, converts dollars to euros and calculates taxes. You'd need a degree in computer science to use it.

The press kit handed out by Enterprise Ireland would make painful reading for Prime Minister Lionel Jospin. Growth in Gross Domestic Product in 2000: 10.7 per cent in Ireland; 3.3 per cent in France. Unemployment: 4.1 per cent in Ireland; 8.9 per cent in France. Government spending as a percentage of GDP: 32.3 percent in Ireland, 53 per cent in France.

READ MORE

No wonder French socialists denounce Ireland's "fiscal dumping", as Paris calls the 10 per cent corporate tax rate (12.5 per cent from January 2003). If Mr Jospin becomes president in May, he has promised to work for a "European economic government" that would harmonise taxation. The French corporate tax rate of 33.3 per cent - not including social charges that add 60 per cent to every salary - makes it difficult to attract foreign investment.

There was Mr Kitt again, boasting that Ireland has received 40 per cent of all US investment in Europe in the past decade.

Setting tax rates was "a matter for each member state", Mr Kitt said. Dublin "will vigourously oppose all efforts to impose an EU rate." Ireland's success could be a model for the central and eastern European countries about to join the EU, he added.

But with Ireland and Britain alone in opposing tax harmonisation, surely it cannot be staved off forever? "We will state our position as committed Europeans," Mr Kitt said. "I don't see it as something we have a long, drawn-out dispute over." invest in Ireland", Mr Kitt said.

What Mr Kitt called the "buoyant, perhaps overheated years of the 1990s" are over, but he nonetheless predicted 5 per cent growth through 2005. There have been job losses, he admitted, but he believed that Ireland would weather the slow-down.

Asked if low growth rates in Germany and France worried him, the minister chose Boston over Berlin. "We would be looking to the situation in the US, where the view now is that there never was a recession. That's very positive for Europe, and especially for Ireland."