asked the Minister for Finance if the dollar devaluation and other adjustments of exchange rates is likely to impair expansion and employment during the coming months.
Ceisteanna—Questions. Oral Answers. - Production and Employment.
7.
Recent movements in exchange rates, taken in combination with the pattern of our external trade, have resulted in an effective over-all depreciation of about 4 per cent in the Irish pound vis-à-vis the currencies of our trading partners. To the extent that the depreciation results in greater price competitiveness of Irish goods, it should have some stimulating effect on production and employment here.
The currency I am concerned about here is the United States dollar. I gather its position is worse than that of the £ sterling. In that situation, will it affect projects American companies may have in line for here?
Almost any move in monetary values will, of course, have consequential effects for good or bad. The general mix at the moment is one that is working to our advantage.
Would the Minister indicate whether the present situation will have any detrimental consequences for us in the context of the EEC situation and, in particular, with regard to the common agricultural policy?
As the Deputy appreciates, any instability is, of course, likely to make it more difficult in working arrangements in relation to the common agricultural policy or, indeed, in relation to any common economic, monetary, fiscal or social policy. One hopes that the present difficulties will be overcome and it would be a very presumptuous person who, at this stage, would say what the final settled position may be.
Does the Minister not agree that at this stage, as matters now stand, the implications for us are detrimental, particularly in regard to the common agricultural policy? Are there any initiatives he can take in regard to adjustments?
It would, I think, be wrong to describe the present situation as detrimental. It is certainly a very fluid situation and it would be wrong at this stage to prescribe what the ultimate mix should be or even to suggest what steps we might take in order to protect our own interests, but the Deputy may be assured we will keep the position constantly under review and we will allow no opportunity which presents itself for working to the advantage of our economy to escape.
I wonder would the Minister feel it necessary, in view of a particular newspaper report this morning which tended to indicate that the Irish £ was floating freely, to state that, in fact, the Irish £ is still related to sterling, in order to clarify the situation?
That is certainly the position. We are floating in common with the £ sterling. The Irish £ is not floating on its own. If it were floating on its own we would, in fact, be in a somewhat better position than the £ sterling but, as there is an overall advantage for us to remain linked with sterling, that is the situation that operates for us at the moment.