LONDON Nov 17 Neighbouring Ireland remains one
of Britain's largest export markets despite efforts to woo the
big emerging economies, a factor that could draw the British
into efforts to prop up the Irish economy.
Finance minister George Osborne has so far offered only
verbal support for Ireland, but the Financial Times reported on
Wednesday there were signs that Britain was considering
providing its own direct loans as part of an aid package.
"Ireland is our closest neighbour and it's in Britain's
national interest that the Irish economy is successful and we
have a stable banking system," Osborne said ahead of a meeting
of European Union finance ministers in Brussels.
"So Britain stands ready to support Ireland in the steps
that it needs to take to bring about that stability," he added.
Britain is not part of the euro zone but could be asked to
contribute some 6 billion pounds ($9.5 billion) under the
European Financial Stabilisation Mechanism, leaving aside any
A Treasury spokesman said Ireland has yet to ask for help
and declined to comment on speculation about how Britain might
Prime Minister David Cameron has led trade delegations to
China and India this year, but British trade with Ireland is
still greater than its business with the huge BRIC emerging
economies -- Brazil, Russia, India and China -- combined.
British retailers such as Tesco (TSCO.L) and Marks & Spencer
(MKS.L) have a high-profile presence in Dublin, and Ireland is
also a crucial market for goods produced in Northern Ireland --
which is trying to wean itself off reliance on the British
public sector for employment.
"The overall exposure to the Irish economy is by no means
trivial, it's something which is relevant to concern about
financial stability in the UK," Bank of England Governor Mervyn
King said this week.
DEALS STILL BEING DONE
Showing the close interdependency between the two economies,
British food manufacturer Northern Foods NFDS.L said on
Wednesday that it had agreed to merge with Ireland's Greencore
GNC.I to create major player in the ready meals market.
Like other leading Irish companies such as budget airline
Ryanair (RYA.I), insulation maker Kingspan (KSP.I), drugs
wholesaler United Drug UDG.I and building materials giant CRH
(CRH.I), Greencore (GNC.L) has a stock market listing in London
as well as Dublin.
For many of those companies the UK has grown to become a
bigger source of revenues than Ireland.
In a vote of confidence in Ireland, Northern Foods and
Greencore said the new company formed by their merger would be
based in Dublin, specifically citing the attractiveness of its
low 12.5 percent corporation tax rate. [ID:nLDE6AG087]
Britain, seeking to trade its way back to economic health,
would like to see that rate increased to closer to its own
levels. Corporation tax in Britain will fall to 27 percent from
next April and the government plans to bring it down to 24
percent in subsequent years.
Bookmaker Paddy Power PAP.I showed on Wednesday that Irish
companies can continue to grow through the current crisis,
saying it planned to create 1,440 new jobs in Ireland, the UK
and Australia over the next three years. [ID:nLDE6AG06H]
Underlying how the company is thriving through talk of
bailouts and recession, shares in Paddy Power are trading at
record highs after it said sales growth in Britain, Australia
and online had helped mitigate falls in its home market.
(Editing by Catherine Evans)