Bertie Ahern
Question:2 Mr. B. Ahern asked the Taoiseach the statistically most accurate measure of Irish living standards for purposes of international comparison. [17232/95]
Ceisteanna — Questions Oral Answers - Living Standards.
The UN and EU systems of national accounts define a number of indicators for measuring the performance of a country's economy but there is no generally recognised single measure of national living standards or economic well-being. The three most widely used indicators are:
(1) Gross domestic product (GDP) which measures the income generated from productive activity in this country irrespective of whether producer units are Irish or foreign owned;
(2) Gross national product (GNP) which measures the income from productive activity which actually accrues to Irish residents; GNP is calculated by deducting from GDP the income made in Ireland that is paid to foreign investors and adding income made by Irish residents on their overseas investments;
(3) National disposable income which is defined as GNP plus net current transfers from overseas including, in particular, EU current transfers.
All three measures can also be calculated on a net basis to exclude depreciation.
GNP, rather than GDP, is a more appropriate measure of the economic well-being of this country because it excludes the repatriated profits of foreign owned companies and other net factor income outflows including national debt interest. However, national disposable income is a more comprehensive indicator of the income available to the nation because of the substantial amounts of transfers received from the EU.
What is the latest percentage per head of either GDP or GNP in relation to our EU partners?
Taking a base of 100, that is EUR 15:100, for GDP per head in purchasing power standards for 1994 — Luxembourg, 158; Denmark, 114; Belgium, 112; Austria, 112; France, 110; Germany, 108; Italy, 116; Netherlands, 102; United Kingdom, 101; Sweden, 98; Finland, 92; Ireland, 83; Spain, 77; Portugal, 68 and Greece, 62.
What is the target figure for when we join European Monetary Union? Is the information given to the House now the same as that used by the EU?
As I said, there is no generally recognised single measure. The most widely used indicators are GNP, GDP and national disposable income. As the Deputy knows, we hope to conform to the Maastricht criteria and meet the figures necessary to qualify for European Monetary Union. The matter is one which is more appropriate to the Minister for Finance. It is essentially a statistical matter and I can only give the information which I have on it.
The reason I am anxious to ensure we use the most accurate measure of Irish living standards is that in eight months the EU will look at all the beneficiaries, particularly the cohesion countries — Greece, Portugal, Spain and Ireland — in their review of Structural Funds. That will determine what will happen in 1999. It is fine for the Minister to say there is no accurate statistical basis to use but we must be able to stand over whatever case we put forward for 1995 figures. If we do not do so we will be in difficulty.
It is generally accepted that if the 75 per cent rule applies we will have to examine the position seriously. Irish GDP per head is now approximately 81 per cent of the Community average which is way above qualification limits. From the point of view of qualification we must look at regionalising the accounts for GDP and that is what we are doing at present.
The Minister of State is correct but the time is fast approaching when it will be too late to carry out any analyses. This matter must be resolved before the end of 1995 which is five weeks away. I have yet to hear the criteria we are using from the Minister for Finance.
The Deputy is imparting information rather than seeking it.
He is alerting the Government to the seriousness of the situation.