Eamon Gilmore (Dún Laoghaire, Labour) | Oireachtas source

Instead, this Government's strategy is about making progress, grounded in a difficult reality. The yield on Irish Government debt has fallen. While markets can always be expected to rise and fall, there has been significant improvement in the Irish position. Since the European Council meeting in June, yields on Irish debt have come in by about 1% and sentiment towards Ireland is improving in debt markets. It will take some time for that to feed through to the real economy but it is an essential component of what we have to do. The Government has always made it clear that there is no solution without jobs and growth and that financial stability is only a step on the way to that growth. That is why we have taken a series of measures to improve the flow of credit in the economy. The financial reform programme is based on the construction, from the wreckage of the bubble, of two pillar banks with capacity to lend into the real economy. At the same time, a series of measures such as the partial credit guarantee scheme and the microenterprise scheme have been put in place to help viable small businesses expand and to grow employment. The Government is currently examining insolvency legislation for small companies in order to facilitate the working out of debt for small and medium enterprises which are encumbered by large debts. The Strategic Investment Fund has developed a number of initiatives to support investment in new start-ups and is examining ways of investing in the restructuring of small business.

We are seeing a return to growth, driven by higher export-intensive activity by IDA Ireland, by our embassy network and by several other Government agencies. These activities have helped to transform the view of Ireland abroad. Evidence that this work is paying off is clear in the strong pipeline of investments in the Irish economy. Foreign investment has created over 9,000 jobs since March 2011. It is also particularly important to see the implications for construction employment of several foreign direct investment projects that have been announced in recent times. Irish small and medium enterprises have made important progress in developing new markets. In France, for example, Enterprise Ireland has supported double digit growth in Irish exports with particular emphasis on construction products and food. Export performance in general has been strong, despite the problems in the eurozone. The core problem, however, remains the domestic economy where consumption has been a drag on growth. The IMF noted recently, for example, that the savings ratio of 14% means that households in Ireland are rapidly reducing their indebtedness. The problem, however, is that the pace of paying down debt by the household sector as a whole, is a drag on growth. If the savings ratio were to come down by only 4%, this would add 1% to GDP.

The mortgage market is critical. It is vital, both on grounds of human decency and for thehealth of the economy that the banks start working through their distressed mortgages and begin offering restructuring arrangements to customers.

At the other end, new mortgage lending is necessary to ensure recent signs of a more positive housing market are maintained. Normalisation of the properly market is an important component of economic recovery, just as dealing with the position of people in mortgage arrears is important to confidence in the economy as a whole.

The Government has taken a series of measures to bolster domestic activity. The jobs initiative, with its particular focus on hospitality, the Gathering and the Action Plan for Jobs are providing a boost for activity in tourism. The modest jobs initiative has already provided a spur for growth, with 10,500 more people working in the tourism sector now than when the Government took office in March 2011. The stimulus package will also boost demand through investment in infrastructure. In addition, budget measures have been introduced to help bring normality to the property market and the National Asset Management Agency is making a €2 billion programme of investment in its portfolio. My colleague, the Minister for Social Protection, Deputy Joan Burton, has also introduced the JobBridge programme and is engaged in a major programme of reform to assist people on the live register in finding work.

No one argues that the rate of progress has been ideal, but it is wrong to claim no progress has been made. Ireland's position has significantly improved in the past 19 months, both in terms of its reputation abroad and the perception of its particular challenges. There is a much greater understanding of Ireland's position and the reasons we are seeking relief from the bank debt taken over by the State. In this instance, again, we need some perspective. There is no instant solution to this problem. The European Council conclusions of last June were a game-changer and Ireland has experienced substantial improvements in bond yields in the intervening period. The Government is not setting a timetable for the completion of the deal. We have been absolutely clear that we will work at this issue until we secure a result that is good for the country and we will do so in private. We have made good progress this week, with very positive discussions between Dublin, Paris and Berlin.

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