Monday 25 September 2017

EU threatened by too much regulation, says McGann

Peter Flanagan and Donal O'Donovan

EUROPE must address its cost base or risk being left in the dirt by the United States and Asia, one of the leading figures in Irish business warned yesterday.

Smurfit Kappa boss Gary McGann said the European Union needed to stop trying to "level an increasingly poor playing field".

Speaking at an IBEC event in Dublin, he claimed the European economy was "threatened by a lack of European competitiveness and too much euro regulation".

"Labour costs need to reduce further. Ireland is going in the right direction from a high cost base but we need more flexibility in labour in Europe," he said.

"The European workforce has poor flexibility, and this is a barrier to companies looking to upsize.

"We don't want a jobless recovery, but that is the danger."

Mr McGann went on to call for a "co-ordinated energy approach" from the common market.

"We have excessively costly environmentally friendly energy sources yet we refuse to even research shale gas even as we increase taxes on energy," he said.

Between 2008 and 2012, German gas prices fell 3pc but are on an upward trend, while US gas fell by 70pc with a downward trend.

"The consequences of such an imbalance are obvious," said Mr McGann, who cut an unusually pessimistic figure at the event yesterday, with most speakers striking a positive tone about the future.

Despite Britain's plans for a referendum on its future in Europe, most executives dismissed the idea that the UK could depart the EU.

DCC chief executive Tommy Breen said he "just didn't see it happening".

"The reality is that contingency planning for something like this will just send you around in circles," he said.

Instability

"Instability is bad, but I don't think anyone can change strategy right now. Ireland could even benefit if the threat of the UK leaving ultimately leads to a better Europe."

His words were echoed by Greencore boss Patrick Coveney, who said: "Britain leaving the European Union would be a disaster for Ireland, but I don't think it will happen."

One hot topic from the floor was the question of whether governments should focus on austerity or try to bring in more stimulus measures now.

"I think the road we have been on is broadly right and I am not advocating a sharp shift, but some stimulus is needed," said Mr Breen.

CRH boss Myles Lee agreed, saying that while austerity had been the right decision at the time, it was now time to look for growth.

Irish Independent

Also in Business