Joe Carey (Clare, Fine Gael)
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Question 49: To ask the Minister for Finance his proposals to develop better tools within the eurozone for dealing with imbalances within member states. [17132/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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In light of the very significant shock to the global economy the issue of imbalances is one that is foremost in the minds of policymakers generally. The Deputy will be aware that the European Council has asked the President of the European Council to establish, in cooperation with the Commission, a task force with representatives of the Member States, the rotating presidency and the ECB. This task force is to present to the Council, before the end of this year, the measures needed to reach the objective of an improved crisis resolution framework and better budgetary discipline, exploring all options to reinforce the legal framework. I look forward to contributing to this process.

Within monetary union, imbalances within individual Member States can potentially have spillover effects for other participants, through for instance higher borrowing costs. It is, therefore, in the interests of all countries to reduce imbalances, such as domestic competitiveness positions. Appropriate income and fiscal policies as well as enhanced flexibility are some of the measures which can reduce imbalances and help to ensure a smoother functioning of monetary union.

In Ireland, many of our imbalances are being corrected. Competitiveness is being improved and our overall focus is being rebalanced towards exports rather than to unsustainable domestic demand-driven growth. In addition, the Government has taken and continues to take the necessary steps to maintain the public finances on a sustainable path, which is an important further step in addressing our domestic imbalances.