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Interview with Enda Kenny, Prime Minister of Ireland, from the World Economic Forum 2017

Following are excerpts from a CNBC interview with Enda Kenny, Prime Minister of Ireland from the World Economic Forum 2017 with Steve Sedgwick.

SS: Taoiseach, Mrs. May's been speaking here in Davos, and of course she laid out earlier this week her 12-point plan. A couple of them I thought related very closely to Ireland, of course point 4, about the closeness between Ireland and the UK, and ease of the border mustn't change as well, and border restrictions mustn't come back in. The second point she talked about was the amount of EU nationals in the UK, and UK nationals in the EU. Both, I think, very relevant to the Irish relationship with the UK. Are you happy with what you heard from Mrs. May, or are there concerns?

EK : Well, I've spoken to the Prime Minister very shortly after she was elected, I went over to Downing St, she's due to come to Dublin in the next short period to discuss some more of these issues. After the vote, the Referendum, her appointment as Prime Minister, she said she would move Article 50 before the end of March. People then looked for clarity as to what Britain wanted, so she's given clarity on the major elements of the relationship that Britain looks for in the next number of years. We've already agreed, the Prime Minister and I, that as co-guarantors of the Good Friday Agreement, that there would be no return to borders of the past, or a hard border. That we would preserve the common travel area, north south and east west, England/Ireland, Ireland/England and so on, and obviously she did say at the European Council meeting, at her first European Council meeting, that she would like a situation where in the negotiations, when they begin, that the question of British people living abroad, and Europeans living in Britain, would be dealt with early on. And obviously the Irish have a particular place here, having very strong relations with Britain over a very long period. So what we plan to do now, for the time ahead, is to continue to grow our economy, to manage our public finances in a prudent fashion, our deficit will be eliminated in 2018, so we want to continue to grow employment, and prove that Ireland is an attractive location for investment, and for expansion from indigenous industries. And secondly, have a very strong, diplomatic engagement with our colleagues in Europe. That's why I have met with Chancellor Merkel, President Hollande, Prime Minister Rajoy, and so on, and my ministers will meet their counterparts all over Europe. And thirdly, so that when they understand all of that, and the negotiations really start, after Article 50 is triggered, that we will negotiate very hard for those objectives.

SS: Taoiseach, it sounds like what you and Mrs. May both want is pretty much the status quo, both over the relationship between the North and the Republic, and indeed the United Kingdom generally, and indeed the Republic of Ireland, as well. Do you think you'll be allowed to keep the status quo as it is, given the constraints that Mrs. May has laid out, and that the Commission is going to put forward, as well?

EK: Well, clearly Britain will not be a member of the single market, and obviously in terms of the border, there will only be the one land border between the Republic of Ireland and Northern Ireland when Britain is removed-, removes itself from the European Union. But we've agreed that there will not be a return to borders of the past, customs posts along that border, and while this may present a challenge, obviously it's a question to which we will achieve an answer. So in that sense, we are both agreed that we preserve the common travel area and that there will not be a return to a hard border, but obviously there are negotiations which will be held in detail, between Britain and the European Union, and we will be negotiating on that end of the trade issues from a European Union perspective.

SS: We can talk about the opportunities in a moment, but do you fear for Irish companies operating in the UK, and UK companies operating in Ireland? As you say, the links, historically, are very, very strong as well. Do you fear now not being part of the single market, that it's going to be to the detriment of big Irish companies in the UK, and vice versa? Because it could take many, many years, way beyond the two-year timeframe to get a new free trade deal between the UK and EU, but I think she'd like to do it.

EK: Yes, well until Britain actually removes itself from the European Union, it remains a full member, and plays its full part and accepts its responsibilities, but I have to say that I'm very confident and very optimistic that Ireland continues to be a very attractive location, both for investment from abroad, and for the possibilities for expansion of indigenous Irish industries. Yes, of course, in terms of currency fluctuations there are challenges here, that's an undoubted fact, but we're looking at, you know, continuing to be competitive, looking at new markets, at new opportunities, so I'm very optimistic about the future for Ireland, despite the uncertainties that there might be about some elements of the decision of Britain to leave the European Union, and that's a matter, where having completed our plan in terms of negotiations diplomatically, we will negotiate very hard to retain our objectives which we have agreed in part with the Prime Minister.

SS: Did I see a quote, sir, saying that you thought it was going to be vicious, the negotiations?

EK: Well, I don't speak for every other leader around the European table. Michel Barnier's conducting the, sort of, the initial negotiations, to be overseen by the European Council in terms of political leadership and so on. And so I do hope that, given the context in which this is now happening, that everybody wants to have the best kind of relationships. The question, at the end of the day, is what will the trading relationships be between the European Union and the United Kingdom, and that's obviously a matter for negotiations, and all questions relevant to that can't be answered at this stage.

SS: But to follow up on my point, Mrs. May speaks to you in one way, Mr. Fox, Mr. Davis and Mr. Johnson speak in a very different way to their European counterparts, as well. Some might say in a very disrespectful way to their European counterparts, as well. With that in mind, and some of the fiery rhetoric we've seen from certain parts of the European political establishment, do you fear the acrimony is just going to get out of hand?

EK: Well, I mean, I do think we're at the very start of this, Article 50 is not even triggered yet, so the commencement of negotiations formally hasn't begun. And clearly it's within Europe's remit to develop itself over the next 15, 20 years, and it's got to make decisions politically about that. This is a single market of almost 500 million people, you know, of really important global impact. We are part of that, we're now a central part of it for the last 50 years, almost, transformed Ireland, so in that sense, obviously the negotiations between the European Union and Britain will be critical in the sense of that relationship for the future.

SS: But sir, everything that happened over the last 12 months or so, and I remember the Irish election and how difficult that was for you, as well, and we saw what happened to Mr. Renzi, what happened to Mr. Cameron, what happened to the presidential election in the US, and the huge electoral agenda that we have in Europe in 2017, as well. Do you not fear that fiery politics will get in the way of economic rationale in these negotiations? I can't see how it won't, sir.

EK: Well yes, but it-, you know, you can have acrimony and fiery politics, and you can have very robust arguments. At the end of the day, politics, not only is it about people, but governments, it's about making decisions, so in this case the United Kingdom have made a decision to leave the European Union, and that creates consequences, obviously. And those consequences will be negotiated between Britain and the European Union, of which we will remain a member. I've made the point oftentimes before, that we've had 50 years of experience in there, so from our point of view, my plan is to continue to grow our economy, create jobs, have a diplomatic engagement with all the members of Europe, so that they fully understand Ireland's very particular circumstances, border Northern Ireland, peace process, Good Friday Agreement and so on, and then negotiate hard on those objectives. So it remains to be seen what the eventual outcome will be, but I think that we do want, you know, very good relationships with Britain, we want good relationships between Britain and the European Union, and beyond. You know, the world is shrinking, as I say, in many respects, and it's very important that people understand that trade is now a global issue, and Ireland, as a very small country, has, you know, particular evidence of that, in and beyond the shores of the European Union, also.

SS : Well, I think Ireland punches above its weight in many ways, sir, but the point raised by the opposition, Mary Lou McDonald, Sinn Féin, they're saying you've got no plan, they're saying you've got no vision for this, as well. How do you respond?

EK: On the contrary, we've got a very clear plan. As I said, we're going to continue to grow our economy, manage our public finances in a prudent fashion, grow employment, reduce unemployment, make Ireland, you know, an attractive location for continued investment and for expansion of indigenous industries, of which we've got ample evidence. The second part of the plan is to have a diplomatic engagement with all the leaders of Europe, and with the ministers of Europe, so that they fully understand our very particular circumstances. We are the only country, now, where there will be a land border where there is a peace process which is guaranteed under, you know, an internationally legally binding agreement, of which I am co-guarantor, along with Prime Minister May, and the third element of that plan, then, is to negotiate very hard when the negotiations start, on those particular objectives. I think that's a very clear strategy, it's a very strong plan, and I intend to implement it.

SS: How concerned are you about events in the north, sir, about the breakdown of government in Stormont?

EK: Well, the election is taking place there, obviously that will be decided on the 3rd of March, and that's a matter for the electorate in Northern Ireland. What concerns me, is that under the Good Friday Agreement, it's imperative that the institutions of the north and the Assembly, they work in the interest of the people of Northern Ireland. We have had an all-Ireland forum, and the outcome of Brexit on the economy. We have sectoral engagements going on at the moment. We have a second all-Ireland forum on the 17th of February. I think this is part of a very clear strategy, and a plan, that the eventual outcome will be for the benefit of the people of the island of Ireland. I set out my credentials in respect of the Republic, and I want to engage with the parties and the people and the businesses of the north, to see that that happens also for them.

SS: On another side, looking at the opportunities, as well, I know that you're speaking to people like Inga Beale, the boss of Lloyd's of London, and presumably a lot of other serious players in the London financial sector, and elsewhere, as well. Why Dublin? Why not Frankfurt? Why not Madrid? Why not Milan? Why is Dublin the destination, potentially, for operations within the EU to be HQed?

EK: Well, Dublin's a very attractive location. English speaking, wealth of talent, obviously very closely connected with London in terms of flights to and from Dublin and London, and between Dublin and the European Union. Financial houses, banks and other businesses will not hang around for interminable delays in terms of doing trade deals. They'll make decisions, and Ireland's a very attractive location at the moment. We have a lot of interest being expressed by companies who want to see regulation, who want to see what the opportunities for investment, or for doing business in Ireland are, and we respond to that. Of course, it's a competitive field, and there are other locations where people could decide to go to, we are in there with the very best. We've grown very strongly in the last number of years in terms of financial services, wealth of talent and opportunities for people to come from abroad, and when Britain has left the European Union, we are the only English speaking country in there then, you know, with a very strong connection with Europe over 50 years.

SS: You just said interminable negotiations. It's not going to happen in two years, a trade deal, is it?

EK: Well, this is-, you have 50 years of regulations and directives, so they're going to be quite complex. So the first half of Article 50 is that you deal with the leaving, but in doing with-, in dealing with the leaving, you have also to take into account the framework for the future, and that's where the negotiations are going to take place.

SS: Finally, sir, populations are angry across Europe. You saw that in the Irish election, as well. They're angry, they want to throw something against the machine, against the establishment, as well. Do you think that you should go to the polls again in 2017 and just be done with having a government supported by the opposition?

EK: Not at all. The people voted in an election, and they gave their answer. The politicians responded to that, and we put a government together which is a minority partnership government-,

SS: Is it a stable government, sir?

EK: It is, and it means that you think differently, it means that you reach out to other parties, that you hear other voices, that you work on a programme which is published, which is transparent and accountable, and you sign deals with other parties on certain issues to keep government working in the interest of the people. So from that point of view, people said, 'You will not put a government together, you'll never be able to get a budget, or be able to pass legislation.' This is not so. We're moving on, as I say. We want to continue to manage our finances, prudently in the people's interest, and continue to grow employment, invest in infrastructure, provide good services for our people-,

SS: So you won't go to the polls in 2017?

EK: Not at all.

SS: Taoiseach, thank you very much indeed for your time.

EK: Thank you very much indeed.

SS: Thank you, sir.