asked the Minister for Finance whether, in view of the public statement of the Minister for Lands that reserves, so urgently needed to prevent restrictions on imports, were flowing in and must be jealously guarded until they have reached the correct level, he will state what decision the Government has taken as to the level at which foreign reserves should be maintained and the reasons for that decision.
Ceisteanna—Questions. Oral Answers. - Level of Foreign Reserves.
The Government's aim is to promote the maximum domestic development of a productive character. This aim would be frustrated if the external reserves of the Government and the banking system were to be depleted for consumption purposes. It is, therefore, gratifying that for more than a year now there appears to have been no deficit in our external payments. The emergence of a balance or a small surplus in the calendar year 1957 would represent, however, only the first break since 1946 in a series of deficits, totalling over £200,000,000.
There is a risk of unintended deficits arising in the future. In the past there have been large and unforeseen variations in external trade which seriously disrupted our external payments. These trends are usually well under way before they can be statistically established and before remedial action can be set in motion. Such action itself takes time to become effective. In 1955, for example, we incurred, with little warning, a deficit of £35,500,000 which had to be financed entirely by drawing down our external reserves. For these reasons, it is clear that the recent modest improvement gives no grounds for complacency, and that no useful purpose would be served by attempting to define an appropriate upper limit for our external reserves.
Would the Minister mind giving that reply to his next-door neighbour, the Minister for Health, so that Deputy MacEntee can now see how unjust were the allegations he made against me some 18 months ago?
You had nothing to do with the change in the situation— except for the fact that you are over there. That is the only contribution you made.
The Deputy was then prepared to use all sorts of propaganda.