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CNBC Transcript: Interview with Enda Kenny, Taoiseach of the Republic of Ireland


Following are excerpts from the transcript of a CNBC interview in Davos by Julia Chatterley and Geoff Cutmore with Enda Kenny, Taoiseach of the Republic of Ireland.

JC: I can tell you, we are joined by the Irish Prime Minister, Enda Kenny, right now, sir, thank you so much for joining us.

EK: Thank you, and resilience is an important part of the journey we've come on over the last five years. Really.

JC: You're being called the Celtic Phoenix here, in terms of the economy. Is the economy's rebound and recovery going to win you this election? Because that's what the polls are saying.

EK: Well, I think it's important to just recall where we were five years ago. You were locked out of the markets, you couldn't borrow money at 15% interest, unemployment was 15, too, debt rising, 300,000 jobs lost and disappointment and disillusionment everywhere. So because of the nature of the plan and the strategy put together which people dealt with, we're now in a very different position. Interest rates below 2%, we'll have our deficit eliminated by 2017, and our debt's now falling below 100% and moving towards European norms, which is great progress. It's not a victory by any means, but what we've done now is set out a strategy and a plan for a longer term economic situation, to keep growth and jobs being created, which means the more you have in employment, the better the engine of your country will provide finance to invest in services that people need. Nurses, teachers, police officers and so on.

GC: Would you be disappointed if you weren't re-elected and able to come back and finish the job? Because some of the polls are suggesting that your tax bribe isn't really working at the moment to get your support up in the polls.

EK: Well, I said to you, there are no tax bribes here-,

GC: Isn't that what the October budget was about?

EK: We've set out a very clear, long term strategy that is prudent, that is fiscally responsible and that is in the best interest of the country both from an infrastructure investment point of view and from a service point of view. Now, I see the economy not as some sort of entity in itself. It's really an engine to provide the resources to invest in services for people, and jobs are the best way out of austerity, jobs are the best way out of poverty, and we set out a plan just this week for a further 200,000 jobs between here and 2020, but to bring back 70,000 of the young people who left and are working in other economies at the moment, come back with that experience to jobs that pay well and that are demonstrated to pay well. So the tax situation in the budget in October is fiscally very responsible, but is based on optimistic figures for the next period, and one thing that we've learned from the past lessons is that we are now controlling public expenditure. In the past, it followed growth up, but this time it's being controlled, kept at 4%, so it's below the underlying rate of growth which means that that cushion is always there.

JC: The money that you spent there, though, in order to finance those tax receipts, was corporation tax income. When we look at the US multinationals, the valuations in the tax sector, the strong dollar, is there not a concern actually that the backdrop of the economy is not going to allow the money to come in this year to finance that? Is it responsible?

EK: Well, the indications are that the corporate tax rates will be able to continue, and we're very clear about that. Our tax rate as you know is 12.5%, it doesn't move up, it doesn't move down, it's across all sectors in all areas of the company, and we have introduced the knowledge box at 6.25%, the first OECD fully compliant knowledge box for qualifying research and innovation funds, so we are very happy that the extent of taxation will continue from the corporate sector. Remember, we've got 1,000 multinationals in Ireland with a cauldron of innovation and research going on.

GC: Yes, but while we're on the tech sector, are you worried that Donald Trump might damage Ireland's technology leadership? He's saying things like Apple should bring all its manufacturing home, technology companies should bring back to America what's American. Do you think he's going to hurt Ireland?

EK: Well, it's a matter for the American people who they elect when the candidates emerge from the Democratic and Republican sides. It's also a matter for the American government to deal with its taxation policy, we have no control over that, but we are very clear what our taxation policy is.

JC: It's surely a concern, though?

EK: Well, I wouldn't presume to assume the result of the Republican nomination, or the Democratic nomination, or the result of the American election, that is a matter entirely for the American people, and clearly, obviously, whoever they elect, you've got to deal with that administration then.

GC: When is the election in Ireland?

EK: It's in the next number of weeks. Early in spring.

GC: So it'll be in the next couple of weeks?

EK: We're going to have the election early in spring, I said that last November, so that's when we're going to have it. So people know this.

JC: So too late for the end of Feb?

EK: Well, I mean, I think elections obviously are something which you can never pre-judge. I'd like to think that the people will give us the continued trust and confidence to finish the job that they gave us, which was to fix our public finances and to put our country back to work. We still have many challenges up ahead , but we put in place a very good platform for the future and continue to manage that successfully in the people's interest. So they'll have their say in a few weeks' time-,

GC: Can you at least tell us when you're going to make the announcement? On what date?

EK: I'll make the announcement in a very public forum in the not too distant future.

GC: Right, but you already know the date?

EK: Yes, I do, and obviously when I make that public, everybody will know.

GC: Excellent, well we very much look forward to that. Enda Kenny, so nice to have you here once again on our CNBC position.

EK: Thank you very much indeed.

GC: Thanks so much for joining us.

EK: Thank you, indeed.

GC: And best of luck with the election, whenever it's going to take place.

EK: Well, the people will decide.