Michael McDowell
Ceist:10 Mr. M. McDowell asked the Minister for Tourism and Trade if he will make a statement about the impact of recent exchange rate problems on Irish exports.
Ceisteanna — Questions. Oral Answers. - Export Related Industries.
Martin Cullen
Ceist:27 Mr. Cullen asked the Minister for Tourism and Trade the steps, if any, he has taken to ensure that the recent currency instability does not disrupt Irish exports; the proposals, if any, he has to counteract the effects of devaluation of Irish export competitiveness; and if he will make a statement on the matter.
Mary Harney
Ceist:31 Miss Harney asked the Minister for Tourism and Trade the steps, if any, he has taken to ensure that the recent currency instability does not disrupt Irish exports; the proposals, if any, he has to counteract the effects of devaluation on Irish export competitiveness; and if he will make a statement on the matter.
Michael McDowell
Ceist:36 Mr. M. McDowell asked the Minister for Tourism and Trade the way in which he proposes to safeguard the volume and value of Irish exports in the light of recent exchange rate instability.
Michael McDowell
Ceist:42 Mr. M. McDowell asked the Minister for Tourism and Trade if he will make a statement regarding the impact of recent exchange rate problems on Irish exports.
Andrew Boylan
Ceist:44 Mr. Boylan asked the Minister for Tourism and Trade if his attention has been drawn to the difficulties being experienced by participants in export related industries as a result of the present currency turmoil and the effect this is having directly on those industries; the action, if any, he will take to remedy the situation; and when he will take this action.
I propose to take Questions Nos. 10, 27, 31, 36, 42 and 44 together.
The dramatic fall in the value of sterling, coupled with the ongoing turbulence in the currency markets since September 1992, created serious difficulties for Irish firms in a number of overseas markets. Firms exporting to the UK market saw their cash receivables in Irish punt terms fall by over 10 per cent and in certain third markets, which take a high proportion of Irish exports, firms have faced serious price competition from UK companies.
The very difficult trading environment which faced many firms in the country required a flexible and constructive response on behalf of all arms of the Government involved in industrial promotion and development. The response of the Government was swift and realistic and was widely supported by industry and across the political spectrum.
Within my area of reponsibility, additional finance was made available to An Bord Tráchtála to help firms with the additional marketing costs involved in maintaining existing business and in securing new orders. I understand from An Bord Tráchtála that a special fund of £800,000 helped more than 540 companies to visit their target markets in the UK or Europe before the end of 1992. A further £1 million has been allocated to this scheme by the board for the first three months of this year and I understand that there is a very strong demand from industry for support.
An Bord Tráchtála also initiated a number of support measures to help exporters including a 1-800 freephone help line to give exporters advice on the new and intensified programmes available to them to assist with difficulties in the marketplace; 40 market specialists from An Bord Tráchtála offices in Europe, the UK and the US were recalled to Ireland to meet companies throughout the country and advise them on specific difficulties and opportunities and, where appropriate, set up market visit programmes and An Bord Tráchtála accelerated its inward buyer missions programme bringing overseas buyers to selected companies in the regions to discuss business opportunities.
In September last year the then Government recognised that a redirection of programmes by agencies would not in itself be sufficient to meet the immediate difficulties of firms affected by the fall in the value of sterling. On 29 September the Government established a working group to look at the nature and content of the problems arising for firms as a result of the decline in the value of sterling and to make recommendations as soon as possible.
The working groups report was considered one week later by the Government on 6 October and an immediate decision was taken to allocate £50 million for the period up to the end of March 1993 to assist firms which have been seriously affected by the turmoil in exchange rates.
The result of his initiative was that through the operation of the market development fund, and through various schemes operated by other State agencies, the Government has been successful in helping companies to maintain employment during a very difficult time. Many companies have indicated that the support that has been available to them has made the difference between shedding labour or maintaining employment; between closing down or staying in business.
That is not to say that there are no problems. The Irish pound is still trading above parity with sterling and interest rates remain a burden on business. Nonetheless the recent realignment of the Irish pound, while unwelcome and not the Government's preferred policy option, has nonetheless provided many of our exporters with a significant competitiveness injection in certain markets.
In 1993 the Government is allocating a grant-in-aid of £37.82 million to An Bord Tráchtála to provide for its marketing support measures. This allocation is 11 per cent higher than the 1992 outturn and will enable the board to introduce new schemes to help the export effort of indigenous industry. One example of such new measures is its Europlace scheme which was launched yesterday and which plans to increase the number of full time sales people on the ground in continental European markets from the current 60 to 150 in three years. I see the acceleration of that shift as a key objective for my Department and An Bord Tráchtála over the next four years.