Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The economic policies of the Government are designed with the core objective of restoring balanced economic growth. This will, in turn, allow for the continued creation of jobs and for the improvement of living standards for the people of Ireland. The policies are paying dividends - yesterday's figures show that employment and unemployment are now moving in the right direction. An essential condition for the resumption of balanced economic growth is sustainable public finances. International research has shown that elevated levels of public debt are harmful for growth prospects and ultimately for employment. As such, the Government is committed to cutting the deficit, stabilising our debt level and putting it on a downward path. Considerable progress is being made in this regard.

I am conscious, however, that consolidation will have a short-term impact on the economy, although I do not accept that the impact is as large as some have suggested. Ireland is a small, open economy with imports accounting for over three quarters of GDP. As a result, a considerable amount of consolidation leaks out through a reduction in these imports. For this, and other reasons, the fiscal multiplier in Ireland tends to be somewhat lower than in many other European countries so economic and employment growth and fiscal consolidation are not mutually exclusive.

The Government has continually stressed that while further consolidation is imperative for this country's future, there is also a need to ensure that such measures seek to minimise the impact on the economy and the labour market. With this in mind, Budget 2013 - like its predecessor - was framed in such a way as to make it as jobs-friendly as possible and a number of measures were introduced to assist in this regard, including several initiatives designed to lend support to Ireland's job-rich SMEs.

It should also be noted that Ireland's commitment to carrying out the necessary structural reforms has had clearly visible confidence effects in the financial markets - as evident in the decrease in bond yields in recent months.

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