Bernard Durkan (Kildare North, Fine Gael)
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Question 124: To ask the Minister for Finance the steps he has taken or proposes to take to improve or restore competitiveness here; and if he will make a statement on the matter. [37796/09]

Bernard Durkan (Kildare North, Fine Gael)
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Question 288: To ask the Minister for Finance when he expects to identify the issues most likely affecting the competitiveness of this economy over the past ten years; the steps he will take to address this issue; and if he will make a statement on the matter. [38145/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 124 and 288 together.

Ireland's recent loss of competitiveness and the need to improve it is something that we have been aware of for some time. Until last year, prices grew faster than those in the euro area, while wages grew at a rate greater than productivity would justify in many sectors. The recent appreciation of the euro against the dollar and sterling has not helped either. The National Competitiveness Council has outlined a range of wider cost factors that have damaged our competitiveness as well. These developments have left Ireland vulnerable in our international markets in the midst of the collapse in global demand.

We need to improve our competitiveness as quickly as possible and there are already a number of positive developments in this regard. Consumer prices in Ireland are now declining at the fastest rate in the euro area. In addition, we are also seeing the benefits of our labour market flexibility: much available evidence points to recent downward pressure on wages in the economy. As a small member of a currency union we have no control over the exchange rates we face so we must focus on improving competitiveness at home. While the falls in domestic prices, easing wage pressures and improvements in productivity are helpful we must not be complacent as further improvements in our competitiveness are essential if we are to position ourselves to benefit when EU and global growth resumes.