Remarks by Tánaiste, Mary Harney at a Meeting of the American Bar Association in the Law Society of Ireland, Blackhall Place, Dublin on Friday 21st July 2000

History and geography have placed Ireland in a very special position between America and Europe.

History has bound this country very closely to the United States. Down the centuries millions of Irish people crossed the Atlantic in search of a new life in a new world. And that tradition of emigration laid the foundation for the strong social, economic and political ties between our two countries today.

Geography has placed this country on the edge of the European continent. One of our most significant achievements as an independent nation was our entry, almost thirty years ago, into what is now the European Union. Today, we have strong social, economic and political ties with the EU.

As Irish people our relationships with the United States and the European Union are complex. Geographically we are closer to Berlin than Boston. Spiritually we are probably a lot closer to Boston than Berlin.

Ireland is now in a very real sense the gateway to Europe. This is especially true for corporate America, whose companies are investing here in ever greater numbers and in ever greater volumes. They see Ireland as an ideal base from which to attack the European market, the largest and most lucrative single market in the history of the world.

Geographic location is not the key factor which influences these corporate decisions: many other places have probably more to offer if that was the deciding issue.

What really makes Ireland attractive to corporate America is the kind of economy which we have created here. When Americans come here they find a country that believes in the incentive power of low taxation. They find a country that believes in economic liberalisation. They find a country that believes in essential regulation but not over-regulation. On looking further afield in Europe they find also that not every European country believes in all of these things.

The figures speak for themselves. It is a remarkable fact that a country with just 1% of Europe's population accounts for 27% of US greenfield investment in Europe.

Political and economic commentators sometimes pose a choice between what they see as the American way and the European way.

They view the American way as being built on the rugged individualism of the original frontiersmen, an economic model that is heavily based on enterprise and incentive, on individual effort and with limited government intervention.

They view the European way as being built on a strong concern for social harmony and social inclusion, with governments being prepared to intervene strongly through the tax and regulatory systems to achieve their desired outcomes.

Both models are, of course, overly simplistic but there is an element of truth in them too. We in Ireland have tended to steer a course between the two but I think it is fair to say that we have sailed closer to the American shore than the European one.

Look at what we have done over the last ten years. We have cut taxes on capital. We have cut taxes on corporate profits. We have cut taxes on personal incomes. The result has been an explosion in economic activity and Ireland is now the fastest-growing country in the developed world.

And did we have to pay some very high price for pursuing this policy option ? Did we have to dismantle the welfare state ? Did we have to abandon the concept of social inclusion ? The answer is no: we didn't.

The present government took office three years ago with a clear tax-cutting agenda. Three years on we have increased the number of people at work in this country by 270,000: that's an increase of 20% in thirty-six months. Over the same period we have brought down the unemployment rate from more than 10% to under 5%. And we have provided very significant real increases in expenditure on key social services such as health, education and training.

We have succeeded because even though we are members of the European Union, including now a currency union also, we still retain very substantial freedom to control our political and economic destiny. Our taxation policy, for instance, is decided in Dublin not Brussels.

This model works. It allows us to achieve our full economic potential for the first time in our history as an independent state. It allows every other member state the freedom to chart its own course for social and economic progress.

And I say: if it ain't broke, don't fix it. There are some who want to create a more centralized Europe, a federal Europe, with key political economic decisions being taken at Brussels level. I don't think that that would be in Ireland's interests and I don't think it would be in Europe's interests either.

The fact is that Europe is not America and it never will be. The people of Europe are not united by common language, common history and common tradition in the way that Americans are. During the next five years, for instance, the process of enlargement is likely to add a further half-a-dozen working languages to the European Union.

It is clear that there is a such a thing as a single market for labour in America. Even with the advent of the single currency it is by no means clear that there is a single market for labour in Europe, or that one is likely to emerge anytime soon.

I believe in a Europe of independent states, not a United States of Europe.