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Dáil Éireann debate -
Thursday, 9 Nov 1972

Vol. 263 No. 7

Ceisteanna—Questions. Oral Answers. - International Monetary Situation.

20.

asked the Minister for Finance if he will make a statement on the international monetary situation with particular reference to inflation.

There is now general agreement that the present international monetary system is inadequate and the question of its reform has been under discussion over the past year or more by the international bodies concerned and by governments the world over. It was decided at Washington last September, on the occasion of the last annual general meeting of the International Monetary Fund, to set up a special group known as the Committee of Twenty to examine the whole system and recommend desirable reforms. This country is represented in the Committee of Twenty. In view of the complexities of the subject it will probably be some time before the committee will be able to complete their deliberations.

I would hope that the proposals forthcoming from the committee and the decisions made on them will help in combating the inflationary forces. For example, better machinery for the adjustment of exchange rates should help to bring about earlier alignment of costs and prices as between the different countries, making for greater stability all round. Similarly, improved arrangements for the control and distribution of international liquidity would be beneficial. Such measures could provide a more congenial climate in which world trade could expand without being hampered by exchange rate and liquidity difficulties.

However, we must not assume that an improved monetary system would of itself solve our inflationary problems. The basic position will remain that we can only prosper if we avoid excessive price and income increases in relation to the levels of those abroad and in relation to our national production. Policy must continue to be directed to this end.

Can the Minister indicate what steps he proposes to take to rectify the position with regard to the Irish £ vis-à-vis the British £? It was announced this morning on radio that the justification for the increase in the price of petrol was due to the fact that the Irish £ is now valued at 9 per cent less than the British £. I suggest to the Minister that this internal matter is something separate from whatever plans may be mooted in Europe.

That is a question of which I should require notice. It is not related to international monetary reform, as the Deputy pointed out. I do not think I should comment on this matter without due consideration.

Does the Minister not regard it as a most serious matter that our £ has become devalued vis-à-vis the British £?

Not alone would I regard it as serious but I would dispute it.

Questions Nos. 21 and 22 postponed.

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