Lucinda Creighton (Dublin South East, Fine Gael)
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Question 92: To ask the Minister for Finance if the December 2008 European Council's adoption of the EU Commission's recovery plan will help stabilise the Irish economy; and if he will make a statement on the matter. [2405/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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In December 2008 the European Council adopted Commission proposals for a European Economic Recovery Plan which envisages a fiscal stimulus to the European Economy of the order of 1.5% of EU GDP. This figure includes actions at the EU as well as at Member State level. The plan involves a range of expenditure and revenue measures, depending on national circumstances, which are designed to stimulate recovery, maximise short-term economic activity and expedite structural reforms to improve the resilience of the economy and support jobs and growth.

As the Irish economy is extremely open and globally oriented, it is strongly affected by the economic circumstances of its main trading partners. However, it is probably too early at this stage to estimate the likely impact of the European Economic Recovery Plan. For Ireland, the budgetary priority is to restore stability to the public finances. In the light of the current difficult international economic environment, the Government's overall budgetary strategy aims at restoring stability to the public finances taking account of economic circumstances, while taking steps also to maximise short-term economic activity and employment, improve competitiveness and protect the position of the least well off.

In line with the call for appropriate stimulus measures by national authorities, we are also maintaining a relatively high level of public investment of the order of 5% of GNP per annum to remedy a historical infrastructure deficit and to support the growth potential of the economy. In addition, a number of specific measures –such as envisaged in the Commission Recovery Plan — have been announced and are being implemented. These include measures to assist those who have recently become unemployed, support for the enterprise and environment sectors, such as the R& D tax credit and capital allowances for energy efficient equipment. Further measures are outlined in "Building Ireland's Smart Economy- A Framework for Sustainable Economic Renewal" which was published in December.