Lisbon will damage Ireland’s foreign direct investment

It is claimed today by Yes campaigner, Senator Paschal Donohue, that for short and long term investors, “A ‘Yes’ vote offers certainty on institutions to lead Europe, within which we have a strengthened position”, whereas A ‘No’ vote offers uncertainty, as nobody really knows how Europe will respond.” This is misleading and does not give a clear picture on Lisbon or foreign investment.

Under Lisbon, the present Article 131 (1) TEC has been amended in order to include foreign direct investment, with Article 206 TFEU referring to the “progressive abolition of restrictions on foreign direct investment.” Presently, foreign direct investment does not directly fall under the EU’s Common Commercial Policy. Ireland and the other Member States have competence over foreign direct investment. Therefore, the EU’s competence over this matter has previously been very limited. Investment agreements with third countries are presently the responsibility of Member States. There is a transfer of competences of foreign direct investment to the EU. The Lisbon treaty brings foreign direct investment directly under the operation of the EU’s Common Commercial Policy. Therefore, it will have serious implications for Ireland’s investment policy instruments. The Lisbon Treaty strengthens the EU’s ability to conclude international investment agreements.

Yes campaigners have consistently claimed that Ireland will lose inward investment and undermine Ireland’s position in Europe if it rejects Lisbon, but in 2008, the country saw a 14% increase in foreign direct investment (FDI) on the previous year. This is the year it first said No to Lisbon. In July 2009, IDA CEO Barry O’Leary said: “It should be noted that 2008 saw a 14% increase in foreign direct investment (FDI) on the previous year, bringing the total number of FDI investments in 2008 to 130.” It is wrong to suggest that there will be gains in foreign direct investment under Lisbon – especially when the opposite is true.

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