BRIAN COWEN: IT,S OKAY FOR FINANCIAL SERVICE JOBS

C O N F I D E N T I A L DUBLIN 000250 SIPDIS E.O. 12958: DECL: 05/07/2018 TAGS: PGOV PREL ECON EI SUBJECT: BRIAN COWEN: IT,S OKAY FOR FINANCIAL SERVICE JOBS TO MOVE TO THE NORTH Classified By: Pol/Econ Section Chief Ted Pierce; Reasons 1.4 (B) and (D). ¶1. (U) On April 14, Irish Finance Minister Brian Cowen (who will become Ireland,s next Prime Minister on May 7) and Northern Ireland Finance Minister Peter Robinson (who will become the FirstMinister of the Northern Ireland Assembly in Jun) announced that their respective governments would facilitate the move of up to 5,000 financial serices jobs from Dublin to Northern Ireland. Robison noted that, "for anumber of months now Bria and I have had meetings, correspondence, and ou officials working together to arrive at this postion." The Ministers highlighted this new inititive as another example of expanding North-Southcooperation. ¶2. (C) On April 16, ECONOFF spoke with Kevin Cardiff, Second Secretary General in the Irish Department of Finance, about the joint announcement. Cardiff said that the Irish government did not intend to make any legal, regulatory, or tax changes to facilitate the move of jobs to the North. Rather, he said, the announcement was intended to "create the right atmosphere and to signal that the Dublin authorities would not block companies from moving some jobs to Northern Ireland." He noted that, for the most part, jobs that move North would likely have been lost to the Republic of Ireland anyway. ¶3. (C) Cardiff said that what was unsaid -) but very much part of the thinking of those who crafted the announcement -- was that if jobs were going to move from the Republic, Irish officials "would much prefer they go to Belfast than Poland." He said that the Irish government also looked at this initiative as creating a bridge for Irish firms to hook more strongly into the broader UK market. ¶4. (C) Cardiff noted that not all Northern Ireland officials were in agreement with the value of this announcement. (Comment: There are significant pockets of unionism that see stronger links with the South as an end-run to subjugate unionist communities in the North. End Comment) Cardiff also said that some in the North wanted Dublin to explicitly state that moving jobs to Belfast was preferable to moving them to other parts of the EU, but he added that no one in the Department of Finance seriously considered such a statement, which "would run afoul of EU law." Cardiff's personal view was that, if Belfast is going to build up its financial services sector, it needs to look beyond Dublin and become a service provider for other nearby financial centers, such as London, Edinburgh, and Glasgow. ¶5. (C) Comment: While this announcement was genuine in terms of the Irish Government,s wish to promote economic growth in the North, and certainly added luster to North-South cooperation, it was also mildly disingenuous. Ireland currently has a surplus of skilled labor in the financial services sector, in part because economic growth in Ireland has begun to flatten out. &The wink and the nod8 between Cowen and Robinson to keep such labor resources on the island, rather then encouraging professional Irish to branch out into the EU, keeps this valuable resource close to home. ¶6. (U) This cable has been cleared by Consulate Belfast. FOLEY