Dáil debates
Thursday, 3 April 2008
Unemployment Rate: Motion (Resumed).
11:00 am
Peter Power (Limerick East, Fianna Fail)
I pay tribute to the Taoiseach on his leadership of my party. He was the seminal politician of his generation and, during his tenure as Taoiseach and party leader, he displayed considerable political and personal skills. He will leave a great and unique legacy in terms of peace, prosperity, partnership and Ireland's standing internationally. For this I compliment him and wish him the very best for the future.
Any debate on the economy must be considered in the context of the deterioration of the economic climate over the past six to nine months. Through intention, design and our own initiatives and strategies, we have transformed our economy from being insular and introverted to being perhaps the most open in the world. We have an open trading island economy. This has had considerable positive consequences but also negative ones. Most economists agree unanimously that our strategy since the late 1950s has resulted in considerable benefits and premiums for the economy. We are the true winners in terms of globalisation. We have made it easy for companies to locate here and do business, and we have made it easy for Irish companies to invest abroad. This has resulted in unprecedented growth in Ireland in recent years.
Ireland is the envy of Europe and the world. Our strategy, however, makes us subject to the vagaries of international economic circumstances. The outlook is such that circumstances will be very difficult. In fairness to the Tánaiste, he identified in the Chamber this morning the international factors that could have adverse effects on our economy. To dress these up as economic mismanagement in Ireland, as the motion seeks to do, is crude and unsophisticated and I do not agree with it.
The international outlook is decidedly unsure. This week, the chairman of the Federal Reserve System, Mr. Ben Bernanke, indicated for the first time that the United States may go into recession. The European Central Bank indicated an interest rate drop is not on the cards for 12 months. There is turbulence in the international financial markets. Oil and commodity prices especially are rising. German growth is projected to decrease to close to 0% this year. All these factors pose serious challenges for our economy, yet this motion seeks, in a crude way, to dress up these challenges as domestic economic mismanagement. The electorate did not buy that during the election campaign last May and will not do so this May or the one thereafter. It is much too sophisticated to do so. The motion is crude and does not deal with the real issues.
Having mentioned the factors that pose challenges, it must be said that the strength and resilience of our economy place us in a good position from which to deal with the international circumstances. Our workforce is much more flexible and skilled than it was ten years ago. We are able to deal in a flexible and managed way with the international conditions that arise. We would not have been able to deal with the current international shocks ten or 20 years ago because of the rigidity of our workforce and economy in that era. The World Bank, in its report last week, regarded Ireland as the eighth best country in which to do business out of 178. The respected publication The Wall Street Journal ranked Ireland's economy third out of 157. This motion would have us believe that Ireland is the worst place in the world in which to do business.
The motion notes that "these jobs have been lost...as a direct result of flawed Government policies, notably the stimulation of a debt-fuelled housing bubble". I disagree with this contention fundamentally because it demonstrates a fundamental misunderstanding of how the economy works. What Fine Gael calls a "debt-fuelled housing bubble" is regarded as providing houses for an expanding economy and population on this side of the House. The motion is misconstrued. It calls on us to invest further in infrastructure and the national development plan but this is exactly what the Tánaiste and Minister for Finance signalled in his contribution this morning.
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