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Kenny delivers message that Ireland is open for business

Taoiseach Enda Kenny delivered a firm message during his whirlwind visit to New York last week that Ireland would rebuild its economy and its doors were wide open for American investment.

In a two-day stopover that prompted considerable media interest, Kenny delivered the keynote address at the American Ireland Fund's 36th annual gala dinner at Lincoln Cetner, attended a community reception at the Irish Consulate and also, in the week that brought the news of the death of Osama bin Laden, paid a visit to the world Trade Center site in Lower Manhattan.

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The Irish government, said Kenny during his address to the AIF, had set ambitious and challenging targets and in the first six weeks in government had already begun to meet them.

"We have the determination and the ideas to succeed," he said.

"My message here in New York is that Ireland is not just open for business but fully equoooed for business. the public finances have stabilized and, after three consecutive years of contraction, this year will see a return to economic growth and the medium term forecasts are more promising.

Ireland's, greatest asset, said Kenny, remained its people.

"We have the youngest population in Europe and a flexible talented labor force of over 1.8 million workers," he said.

The taoiseach, in his speech, drew a line in the sand with regard to an issue that consistently receive attention when U.S. and world media attention is directed at post-Celtic Tiger Ireland.

The new government was committed to making many changes for the better, he said.

"But I will close this evening with a promise that one thing will not change. Our corporation tax rate of 12.5 percent will not change.

"Ireland needs to grow its way out of its current difficulties and research by the OECD (Organization for Economic Cooperation and Development) has pointed to the importance of low corporate tax rates in encouraging growth.

"Our 12.5 percent rate of corporation tax is a constant which will help us deliver change and keep us in the path to recovery and growth."

While his AIF speech was general in tone, Kenny was more pointed in his response to press questions most especially in an interview given to Connell McShane of Fox Business News, excerpts of which were provided by FBN.

Here are some of his responses.

On whether Ireland will default on its debt: "Ireland has no intention of defaulting. Life is a difficult thing to guarantee. We recognize the scale of the challenge we face here. That's why there is an austerity program in Ireland. That's why we are meeting those targets. Ireland wants to pay its way, play its part, and we want flexibility from Europe to do so. In respect to the banks we have made the decisions, we put an end to the confusion of the two and a half years. There is a great hope and optimism in Ireland that at long last the government is facing this challenge head on."

On what he would say to Wall Street investors: "Ireland is open for business. New government. Different sense of priorities, decisiveness and certainty. We are not moving off our 12 and a half percent corporation tax rate. We are making serious decisions about banks and the future."

"On his statement that the 12.5% corporate tax rate is not open to discussion: "Correct. It's very transparent, it has been fully understood by many of our European colleagues. To move from it would represent a massive breach of trust."

On whether bond holders will take a hit: "The decisions made by my government in respect to pillar banks, the Bank of Ireland and the Irish Bank, we agreed with the ECB not to touch senior bond holders in those two banks. However as Anglo Irish Bank was not subject to the serious stress tests as the other banks, and has no claim for further capitalization, we recognize it is in a wind down situation its senior bond holders are in a very different category than those senior bond holders in the pillar banks. If a requirement comes in for further capitalization the government will obviously treat that in a very different way than in the pillar banks."

On the 14% unemployment rate in Ireland: "We deal in reality and the truth of the challenges we face. Next Tuesday in our Parliament we will introduce a jobs initiative which is focused primarily on releasing obstacles to employment, on providing credit for business from banks, a partial loan guarantee system."

On whether the government will spend money to create jobs: "No we are not. Our country can borrow money, our banks can't borrow money, we have been funded to a great extend by the bailout of the IMF. We want to get out of that and be back in charge of our own economic destiny. We have already spoken to the troika, which supervises affairs in Ireland at the moment, and within the constraints of the IMF-EU we will introduce the jobs initiative. We will pay for that in part by a levee on the pensions industry which has been agreed. We have agreement from the troika of an adjustment within the measures of the overall deal."

On whether there will be a cut in public sector pay: "In Ireland we have the Croke Park Agreement between labor unions and movement to re-juice the numbers working in the public sectors and to apply certain conditions to that. We want that deal accelerated to achieve its full potential. My government is working with the labor unions to see that is implemented and achieve the savings through that agreement."