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January 1st marked the commencement of Ireland’s six-month presidency of the European Union. The Irish Presidency happens at an unique moment in European politics as it will be the last one under the present parliament, and so marks the end of a cycle in European policymaking. This moment offers the opportunity for the Irish Presidency to promote a renewed, non-centralist, vision of Europe that will benefit all its parts, and therefore its whole. This will mean the continued upholding of the national veto on matters of taxation, and indeed the evolution of an approach to financial services and other regulation that incorporates pan-European, and indeed global initiatives to promote the emergence of single international markets.

In May the parliamentary elections will commence, and the accession countries will come into the Union, bringing change and a new dimension to the community. Already there has been an indication of the possible impact these new countries may have on Ireland, with the announcement that Philips are moving 150 financial services jobs to Poland. Thus, while promoting the single market agenda, Ireland too must live with its consequences.

While it is clear that more than ever Irish companies will have to focus on competitiveness (and that either means cutting jobs/wages, or finding higher value added work), the enlargement of the EU should also be looked upon as an opportunity for Irish companies. With less developed financial markets, these ten new countries offer potential to Irish based financial services companies to sell into these markets, offering products such as life assurance.

June will also mark the end of something else European - the coming to an end of the Financial Services Action Plan (FSAP). In May 1999, the European Commission launched this plan, with the aim of creating a single market for financial services. The commission aims to complete the integration of the securities and risk capital markets by June, with completion of the entire plan scheduled for 2005. This plan is on target, with the transposition of the Investment Services Directive (ISD) a top priority for the Irish presidency.

While the Irish financial services industry has welcomed the drive towards creating a single market, recognising the reduction in costs and increase in efficiencies this would bring, there are still a number of outstanding concerns, particularly with regards to the ISD. On page 1, both Paula Downey, head of compliance with Davy Stockbrokers, and Brian Healy, director of trading with the ISE, express their reservations on the Directive. One of their main concerns are measures introduced at the behest of continental European countries, which do not have a broking landscape similar to that in Ireland and the UK.

The concern that Ireland may lose its competitive advantage from having to comply with regulations that suit other countries is not new, and is something that we must all keep a close eye on. Not so long ago Paul Dobbyn, a partner with A&L Goodbody, wrote in these pages that the Commission’s ‘one size fits all’ policy was damaging the financial services sector in Ireland. As the EU swells to 25 countries, it will be very important to ensure that Irish concerns don’t get swept aside.

Directory of funding
Overall 2003 was a hopeful year for the financial services sector. While some sectors slowed further, and some companies closed operations, the sector is still growing. Securitisation continues to out-perform, with significant growth in 2003. Writing on page 16, Peter Walker, a partner with A&L Goodbody, predicts that 2004 will be just as successful, providing that the industry maintains its close relationship with the Government and ensures that legislation meets the industry’s needs.

Conventional M&A activity, while recovering, continues to run at lower levels than at the peak, but debt and other forms of corporate financing have been booming in 2003. Next month we shall publish the first Directory of Funding by Irish corporates and banks - which will list the transactions recorded in 2003 providing information on deals under headings such as deal size, pricing advisers, and deal background.

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