Dáil Éireann díospóireacht -
Wednesday, 14 Oct 1998

Vol. 495 No. 2

Written Answers. - Economic Policy.

Bernard J. Durkan

Ceist:

67 Mr. Durkan asked the Minister for Finance whether he has formulated plans to protect the Irish economy in the event of the continuing turbulence in the international financial and economic markets; whether he anticipates change to protect this country's interest; and if he will make a statement on the matter. [19601/98]

Michael D. Higgins

Ceist:

100 Mr. M. Higgins asked the Minister for Finance the influence the global economic crisis will have on the Irish economy; the measures, if any, he proposes to take to counter any adverse effects; the measures, if any, Ireland can take in conjunction with others to deal with the crisis; and if he will make a statement on the matter. [19518/98]

Bernard J. Durkan

Ceist:

130 Mr. Durkan asked the Minister for Finance if he has satisfied himself that all the necessary measures required to safeguard the Irish economy are in place in the run up to 1 January 1999 in the context of international financial transactions; and if he will make a statement on the matter. [19626/98]

Bernard J. Durkan

Ceist:

131 Mr. Durkan asked the Minister for Finance if he expects falling financial markets worldwide to affect the Irish economy; the measures, if any, he proposes to take to offset this; and if he will make a statement on the matter. [19627/98]

Bernard J. Durkan

Ceist:

134 Mr. Durkan asked the Minister for Finance the plans, if any, he has to address market turbulence arising from worldwide trading and investment factors; and if he will make a statement on the matter. [19632/98]

Minister for Finance (Mr. McCreevy)

I propose to take Questions Nos. 67, 100, 130, 131 and 134 together.

Ireland as a small and highly open economy — in which trade and flows of foreign direct investment (FDI) have made a major contribution to strong growth in output and employment over time — cannot expect to be unaffected by the deterioration in the global economic environment. Global growth prospects for 1999 have been downgraded significantly by the International Monetary Fund and other international forecasting agencies. However, prospects for the US and EU — the destination for three-quarters of Ireland's exports and in the case of the US the major source of FDI into the Irish economy — appear relatively favourable. The marked slow-down in emerging markets is likely to result in some deceleration in growth in the developed world. However, the consensus view at present is that economic growth in the OECD area is likely to remain reasonably robust, but as I indicated in this year's budget economic growth in Ireland is expected to slow down in 1999 and later years.

By common consent among the participants at the joint IMF-World Bank annual meeting last week, the EU has a crucial role to play in helping to stabilise the international economy. By sustaining relatively rapid economic growth into next year the EU economies will comprise a major growth pole in the international economy. The launch of EMU will also make a significant contribution to the restoration of international financial stability through the maintenance of strict internal policies within the euro area focused on the achievement of price stability and on the conduct of budgetary policies in accordance with the terms of the stability and growth pact. The increased emphasis on co-ordination of EU economic policies in the context of the establishment of EMU will help maximise the contribution of the EU economy to global economic recovery.

In the period leading up to next December's budget I will be monitoring closely international economic and financial developments and assessing their impact on prospects for the Irish economy. Budgetary strategy will be framed explicitly in the light of the unfolding international situation in order to ensure the medium-term sustainability of Ireland's economic performance.