Thank you for inviting me to address the Ulster Bank Public Affairs lecture. It is a great pleasure to be back in Belfast again, and in particular to be here at Stormont in these impressive surroundings.
Many of my former colleagues in government spent long days and nights here in their efforts to assist in the restoration of a devolved power sharing government. But it's my first visit to what is now the home of the Northern Ireland Assembly.
This building has housed many divergent assemblies over the past seven decades or so – from parliaments, to the civil service, to an operations room used by the Royal Air Force during World War II. And more recently, in 2005, for the first time since that war, it was used for a non-political purpose… the funeral service of former Manchester United footballer, George Best, as it was the only place in Belfast suitable to accommodate the thousands and thousands who wanted to attend. And today it plays host to what I hope will be a dynamic discussion on a new and increasingly important dimension of Northern Ireland – the strengthening of the regions links with the EU and the European Single Market.
I'm looking forward to sharing my views on the EU Single Market and its implications for Northern Ireland with you. But I'm also looking forward to hearing what you – the many business people here in the audience, and also those of you involved in Northern Ireland's political institutions – think of the Single Market from your unique perspective.
I'd like first, as an outside observer, to say a few words on how far Northern Ireland has come in recent times – both economically but also in terms of your engagement with Brussels.
As you know, the First Minister, Dr Ian Paisley, and Deputy First Minister, Martin McGuinness, had an extremely positive meeting with President Barroso last month. And what José Manuel Barroso said that day is worth repeating: the EU's commitment to Northern Ireland is not for one day, it is a commitment to our shared future – the future of Northern Ireland as a fully engaged part of the European Union.
With a view to improving the regions' participation in EU activities, President Barroso has recently created a Commission task force on Northern Ireland. This will look at all the Community policies and programmes which can play a role in strengthening economic development in Northern Ireland. It will also explore how all the administration, business and research institutes can become more deeply involved in EU initiatives and programmes. This will allow the EU to play its full role in strengthening the position of Northern Ireland.
So what about the economy? I'm an accountant, and many of you are bankers, so we almost speak a common language. Let's look at some of the figures for Northern Ireland. Over the past couple of years, Northern Ireland's economy has taken huge steps forward, in terms of both growth and job creation. Figures show that Northern Ireland was the 2nd fastest growing region in the UK in 2006. That's impressive. Exports too have been growing, increasing by 20% between 2001 and 2007.
These figures show that the economy is on a good path. I would also argue that the existence of the EU Single Market, and the stimulus it provides, can at least partly be credited for this strong performance.
The truth of course is that I don't need to go to any statistics bodies to see how things have picked up here in the past half-dozen years – a quick glance at the property prices in Belfast in any of the daily papers tells the story eloquently enough. Indeed, a renowned Paris-based publication, Le Monde Diplomatique, recently discussed the phenomenal contribution to the economy of tourism growth in recent times.
All of this being said, you all know as well as I do that the global outlook for 2008 is somewhat sobering. And the Northern Irish economy reflects what's going on elsewhere in the world, so there is no room for complacency. Neither here, nor in any of the EU's other 267 regions.
That's why at EU level we have to continue to strengthen the Single Market. Much has been achieved since the launch of the Single Market in 1992. By bringing down barriers to the free movement of goods, services, capital and people, and by strengthening competition, the Single Market has raised Europe's output by well over 2% and created 2.75 million additional jobs.
Thanks to this market, people can travel, study, work and retire throughout the EU. This kind of mobility presents new opportunities to citizens and firms. Looking at the Ulster Bank website, it offers translation to workers in Polish, Portuguese, Lithuanian, and even Chinese!
Within the Single Market, consumers now have greater choice of quality products and services, often at lower prices. For example, flying to or from Belfast International Airport is now cheaper than it used to be, and the same goes for access to telephone services.
Businesses can operate in a huge European market of nearly 500 million people – the largest single market in the world – without being hindered by national barriers and unnecessary administrative procedures. This presents a great opportunity for Northern Ireland. It has a number of comparative advantages – such as a highly educated and skilled workforce and a very cost-efficient business environment – which makes Northern Ireland an interesting hub for businesses to serve the EU market.
Capital flows easily within the Single Market, sustaining companies and generating growth. In this respect, Northern Ireland has been very successful in actively attracting Foreign Direct Investments from the US, Asia and the EU. Today, more than 700 foreign investors are investing in Northern Ireland, thereby creating more than 70.000 jobs.
As regards strengthening the Single Market, the last time I addressed an Ulster Bank audience was back in late 2006. I told you then that our thinking caps were on about future perspectives for the Single Market. That work included extensive consultation with business and consumers on where we should go next. The Single Market Review is the fruit of all that work.
It's a very comprehensive package, but the overall objective is very simple: help markets work better for the benefits of small businesses and consumers. This will mean focusing more on collecting really strong and solid economic evidence on what barriers still remain in place. However, it's not just about regulation – quite the opposite in fact. We will try instead to use a large mix of instruments, ranging from some new legislation, to soft law, to improved partnerships with the 27 Member States. We also want to hear more from a range of other stakeholders who are becoming increasingly important players in the Single Market - consumer groups, small business, and regional bodies, to name but a few.
Let me now focus on the area that is probably of most interest to you: Financial Services. In general it can be argued that substantial progress has been made toward creating a Single Market for financial services. Capital markets are largely integrated, competitive and equipped with modern regulation. With the Capital Requirement Directives, we have implemented the Basel II framework. With MiFID, we have put in place a comprehensive pro-competitive horizontal regulation of investment services. With Solvency II, we will bring a modern regulatory framework in insurance.
However, the Single Market cannot function effectively in the absence of consistent implementation and enforcement in the Member States. Moreover, the recent financial turmoil has stressed the need to ensure effective cooperation and exchange of information between supervisors. In this respect, several improvements to the supervisory framework are needed. Obviously, we should build on the existing architecture; any radical institutional overhaul is neither feasible nor needed at this stage.
The Ecofin Council Conclusions last December have provided us with a clear roadmap setting out how we should strengthen cooperation and supervisory convergence. We will ensure quick implementation of these agreements.
While integration of wholesale markets has progressed significantly, in retail financial services it has not yet reached its potential. The Single Market Review has identified a number of areas where work should be undertaken in order to improve the competitiveness and efficiency of European retail financial services markets. Eventually this should bring a range of tangible benefits to European consumers: quality products that meet their needs, increased confidence in the products and services on offer, and better information and advice on which to base their choices.
Let me point out some concrete initiatives that have come out of the Single Market Review:
On 28 January last, the Single Euro Payments Area (SEPA) was officially launched. An efficient Euro payments market - where payments can be made quickly, cheaply, easily and reliably - is a key component of a competitive economy. Efforts will continue to further develop and strengthen SEPA.
To reinforce customer mobility, we have invited the banking industry to develop, by mid-2008, a Code of Conduct to facilitate the switching of bank accounts within each EU Member State. Such a service should make it easier for customers to switch their bank account from one bank to another. We have also emphasised to industry that there should be no discrimination against customers on the basis of nationality or residence when opening bank accounts.
A somewhat related issue is product tying. This year, we intend to examine existing practices, where consumers are forced to buy additional products, and assess whether intervention is needed.
For most people, taking out a mortgage is probably the biggest financial decision in their lifetime. In December 2007, we presented a White Paper on the Integration of European Mortgage Markets which sets out our strategy to improve the efficiency and competitiveness of EU residential mortgage markets.
Finally, we want to empower consumers to make appropriate financial decisions. This can be achieved not only through the provision of good-quality information, but also by giving greater emphasis to the wider financial education of consumers, so that they are in a position to ask the right questions. In December last year, we published a Communication on Financial education, stressing that it is a key element in empowering consumers to take more appropriate financial decisions. Other initiatives focus on reducing financial exclusion by facilitating access to a basic bank account and improving alternative redress mechanisms.
Let me conclude by saying that the Single Market has opened up enormous economic and working opportunities that have transformed the lives of millions of Europeans. With its open and flexible economy, Northern Ireland is now in a position to grasp those opportunities and make the Single Market work to increase prosperity in the region.
Thank you very much, and I now look forward now to hearing your views on this.
 Source: Department of Enterprise, Trade and Investment of Northern Ireland.
 Source: Invest Northern Ireland.