Thank you, Sir, for allowing me to raise this matter on the Adjournment. Since March this year the value of the Irish pound has risen from 95p sterling to more than 98p and it reached 99p yesterday. The 4 per cent increase in its value is having a serious effect on our exports to the UK and Northern Ireland. It adversely affects the competitiveness of our exporters against UK suppliers in Third World markets, Europe, America and elsewhere.
Yesterday, the Irish Dairy Board stated the Irish pound had risen to an unrealistic level which caused it to switch a product from the commercial market to intervention sales. While 30 per cent of our total exports go to the UK and Northern Ireland, 50 per cent of the exports of the labour-intensive, manufacturing sector go to other markets. A loss of market share on those markets will have an immediate impact on Irish jobs. A survey carried out among exporters in the past few days shows that the punt at a value of 99p will result in an average drop in sales of 7.68 per cent while employment in those companies could decrease by 7 per cent.
The value of our currency is a major element in our international competitiveness but the negative effect is compounded by the very serious tax/PRSI wedge. Companies maintaining operations in Ireland and the UK report that the Irish operation is becoming uncompetitive mainly because of our tax and PRSI rates. One recent example was Pretty Polly in Killarney, a company that faced up to a great number of problems. It is one of the major companies in the south Kerry area but the problem is that in Killarney the social cost is £20 more per employee than in England, which posed a major dilemma for the company. Unless we come to terms with our penal tax on jobs here there will be other examples of the type of problem facing Pretty Polly.
The Government must find some mechanism to reduce the Irish pound from its present unrealistic level. This could involve a reduction of interest rates or intervention by the Central Bank in the market by selling Irish pounds, which it did yesterday or the day before. In the long run, however, we must question the Government's decision which seems to be to stay aligned to the Deutsche Mark rather than the pound sterling which accounts for a larger percentage of our exports and a much larger percentage of expert related jobs.
The Government should also consider increasing the funds available for trade promotion to allow exporters to visit their markets. There was a decrease of £3 million, or 8 per cent, in the Estimates for the marketing and administration funds of An Bord Tráchtála which will result in fewer grants being available for private individuals trying to market their products in the UK and other destinations, resulting in further problems for Irish exports. Even though we are performing well ahead of the world average at the moment, we cannot take these markets for granted. There is competition for markets and unless we sustain our efforts we can lost them quite easily.
It will become obvious in time that a commot market which does not have a common currency is a nonsense. Where would the US be with 52 separate currencies? Pressure will come from the new entrants to the European Union for a common currency, and the Government should be using all its persuasive powers to move Europe in this direction. Although there are vested interests against such a move in the long run it represents the best option for an international trading economy like ours. Will the Minister spell out the Government's contingency plans to prevent a recurrence of what happened at the end of 1992? It should have a policy to ensure that Irish exporters are protected and that jobs, especially indigenous jobs, are not threatened. Currency fluctuations are affecting indigenous industry more than other sectors. I look forward to the Minister's response.
