John Minihan (Progressive Democrats)

I welcome the Minister of State to the House. I am grateful for the opportunity to speak on this subject, which has, as Senator O'Toole stated, become an integral part of the society in which we live and the way in which we conduct our business. Social partnership has been a feature of public life here since 1987 and the partnership process has become an accepted part of our political arrangements and essential component of the way in which our system of economical management functions. Ireland has achieved great success in recent times, to which social partnership undoubtedly made a significant contribution. In particular, it has helped us to deal with change and cope with the rapidly changing demands of the international marketplace.

Our economy has undergone dynamic changes and a process of adjustment during the past 15 years. Old industries have closed, but new ones have replaced them. Old technologies have been abandoned, but new ones have been embraced and old work practices have been jettisoned and new ones adopted. Employers and workers have proved that partnership is the key to the workplace and our future success. It facilitates change in management for everyone's benefit. This is a crucial part of the partnership process.

Globalisation was seen as a threat by many people in recent years, but we saw it as an opportunity to be embraced. The more we opened our economy to outside investment, influences and competition, the more we succeeded. Our model is now being copied by many other countries.

Social partnership was an easy system to operate during the past five to six years. We had a rapidly growing economy, the capacity to increase public spending substantially and the ability to deliver generous increases in social supports. However, we are now dealing with a more demanding situation. The international economy has slowed remarkably. We continue to out perform our European neighbours, but we have not been immune to the pressures of international recession.

The rapid appreciation in the value of our currency in recent months adds to our difficulties. The euro reached an all-time high against the dollar today. A rising currency is good news for us in terms of inflation. A strong euro means that we do not import price inflation from the dollar and the sterling areas. However, a rising euro represents a challenge for exporters. Ireland is an exporting country. Statistics show that we are now one of the greatest trading nations in the world, particularly if we measure international trade as a percentage of our total economic output. Our ability to deal with this challenge will be crucial to our continued economic success.

I hope that social partnership will help us to deal with that challenge just as it helped us to deal with similar challenges during the past 15 years. The new partnership agreement, Sustaining Progress, is comprehensive and covers a wide range of issues relating to social inclusion, employment and economic progress.