Vol. 432 No. 6
115 Mr. Durkan asked the Minister for Enterprise and Employment the means by which he intends Irish industry to capitalise on lower interest rates with a view to increased employment; and if he will make a statement on the matter.
A key role for Government in the economic area is the creation of a favourable environment for industrial and business activity generally. One of the principal elements of the Government's new approach to enterprise policy, as reflected in their recent response to the Culliton and Moriarty recommendations, is the formulation and implementation of an industrial policy which will encompass all areas of public policy which have a significant impact on the creation and maintenance of competitive enterprises in the industrial sector. These include not only the traditional instruments of policy in the form of direct incentives and advice from State agencies but important areas ranging from infrastructure and costs of services to inflation, interest rates and exchange rate stability. Clearly low interest rates are a very important factor in creating a favourable environment to assist Irish industry and create jobs. It also assists IDA's promotional efforts in marketing Ireland to potential industries overseas.
The substantial reduction in interest rates which has occurred over recent months is undoubtedly having a beneficial impact on industry and on prospects for industrial development in the short to medium-term. Reduced interest rates contribute towards greater competitiveness of Irish industry and will help companies recover from the recent currency crisis. Lower interest rates can also be expected to impact positively on investments through lower borrowing costs to industry to fund projects, stimulate consumer spending and have a beneficial impact for industrial growth and job creation.
However, the Government recognises that for industry to reap the full benefits of lower interest rates it would be important that current rates be maintained for a substantial period of time. I can assure the Deputy that the Government will continue to do all it can to ensure that prevailing rates area maintained for as long as possible.
From my own point of view I recently met with the Chief Executives of the main banks at which they emphasised their commitment to productive investment in Ireland and outlined measures they had recently put in place to give stronger effect to this commitment. Both sides agreed on the need for improved liaison and communication between the Department of Enterprise and Employment and the banking sector in the interests of all segments of the business sector. It was further agreed that arrangements be put into place to achieve this improvement by the establishment of a standing liaison group chaired by the Department of Enterprise and Employment.
