asked the Minister for Finance if, in view of the fact that the level of this country's sterling assets did not decline last year and in view of the fact that it is likely the level will increase this year, he will state if the Government proposes to take any steps to reduce the level of their assets.
Ceisteanna—Questions. Oral Answers. - Sterling Assets.
The Deputy appears to regard the level of sterling assets as indicating the country's net external capital position, ignoring the possibility of external liabilities being incurred which, while obviating for a time the realisation of external assets, cannot be redeemed as to principal and interest except at future cost in terms of external resources.
The factor which determines whether external capital is being lost or gained is the outturn of the balance of payments as a whole. A deficit indicate a net reduction in external capital, however it is financed, while a surplus indicates a net increase.
In 1952, the deficit in the balance of payments, or net decrease in external capital, was £9,000,000 as against £62,000,000 in 1951. In 1952, the net addition to domestic capital, after allowing for depreciation, was £39,000,000, giving a figure of £30,000,000 for the net increase in national capital, i.e., in external and internal capital combined. By contrast, the reduction in external capital in 1951 was £62,000,000 while the net increase in domestic capital in thatyear was virtually the same, the result being that there was no increase in national capital.
Government policy regarding the external assets in Irish ownership has been stated on many occasions. I would refer the Deputy to the reply to his question of 26th June, 1952, on this subject.