Pat Rabbitte (Dublin South West, Labour)
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Question 153: To ask the Minister for Finance his views on the down side risks facing Irish exporters, and the economy here more broadly, as a result of the strengthening euro; and if he will make a statement on the matter. [37699/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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For a very open economy such as Ireland's exchange rate movements can have a large impact on living standards. In this regard, the appreciation of the euro against both the dollar and sterling is clearly a concern as it undermines the competitiveness of the exporting sector.

The traditional-type industries exporting to the UK appear to be especially vulnerable to appreciation of the euro. In addition, indigenous firms competing with UK-based firms on the domestic market are exposed to euro appreciation. The retail sector is also exposed to euro-sterling developments given our land border with the UK. On the upside, the appreciation of the euro, particularly against sterling, brings some benefits in terms of reduced prices for domestic consumer goods as a large amount of these are imported by retailers from the United Kingdom.

As a member of a monetary union, it is not open to us to adjust our exchange rate, but also of course there are benefits to being a member of such a union during these very challenging times in which we live. What is vital, however, is that we concentrate on restoring our competitiveness through other mechanisms, such as adjusting pay and non-pay costs as well as increasing in productivity.

I would also point out that Government initiatives such as the Enterprise Stabilisation Fund provide targeted support to indigenous companies, including those engaged in exporting to assist them in the exceptionally difficult business environment in which they are operating at present.