Bernard Durkan (Kildare North, Fine Gael)
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Question 137: To ask the Minister for Finance when he expects the full impact of the international financial crisis to impact on the economy here; and if he will make a statement on the matter. [45559/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Problems in global financial markets are already having a significant impact on the Irish economy. For instance, difficulties in international financial markets are the main reason why the pace of demand in our major trading partners has slowed, with many experiencing periods of contracting economic activity. This poor international economic climate is adversely impacting on our export performance.

There is no doubt that Ireland is in a period of contracting activity this year and next. However, to be able to assess the full impact on the Irish economy would require knowledge of when the global market will pick up and when developments in international financial markets achieve stability. Unfortunately, these cannot be projected with any degree of accuracy.

Through the introduction of the Bank Guarantee Scheme the Government have sought to maintain an environment where the financial markets can continue to function normally and banks can continue to support economic activity through their lending policies. I welcome the fact that many of these institutions have already announced funding schemes aimed at meeting the needs of the SME sector and I will keep this important area of economic activity under review.