Bertie Ahern (Dublin Central, Fianna Fail)

On the first issue, in fairness to the social partners, while the national implementation body held numerous meetings during the round, there were not that many breaches. By and large, people stuck to the terms of the agreement and there was good compliance with it. However, my Department is undertaking an examination of the effects of progress on a number of areas, which will be ready shortly. While there were difficulties with the pay terms, I would not play them up. It worked well and people tried hard, including organised workers.

There is concern about the second issue. As a small and open economy, we have learned that competitiveness and flexibility are key to economic development, and that is a simple reality which must guide us in the talks, not least when it comes to pay. We must price and position ourselves in a very challenging market. We can best protect incomes by setting wage growth at a sensible and affordable level and it is important that we do not undermine the job creation capability of the economy or our international attractiveness as a place in which to work and invest. This is the context in which a successor to the current national agreement must be considered.

Deputy Sargent referred to energy policy while Deputy Kenny referred to the US deficit. These are the two concerns on the horizon. Energy is a concern for the reasons I stated earlier. The issue has moved to a new plateau because of the strength of Russian control and the Iranians and a number of other oil producing countries on the other side. This is a concern. We saw what happened at the turn of the year following the difficulties with the Ukraine and the potential knock-on effect on European oil supplies. This could have a significant effect on the economy and it means everybody will examine alternatives. Deputy Sargent mentioned the Swedes but we must examine our own sustainable energy policy and natural resources, including gas supplies.

I find it increasingly difficult to understand how the US, with a budget deficit of more than 6%, is not forced into dealing with it. In some ways, thankfully, the US is not. If the Americans decide to correct the deficit in a major way, it would have a worldwide impact. However, they seem to think the vibrancy of their economy makes such a deficit sustainable or at least only needs a marginal correction. This is the fourth or fifth year international economists have stated this will be the year the Americans correct it. If they were to make a hard cut a year, it would have an effect. I hope, if they tackle the deficit, it will be done on a phased basis. I do not see it having a major impact in the short term because they are not tackling the problem but if they change policy, inevitably it will have an effect on us as an exporting country and as a country with a significant connection with the US through the 600 American companies located here and the significant number of Irish companies based there.

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