Bernard Durkan (Kildare North, Fine Gael)
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Question 106: To ask the Minister for Finance the extent to which the issue of competitiveness in the economy has been addressed to date, with particular reference to the need to be in a position to compete with other EU member states and particularly our nearest neighbours; and if he will make a statement on the matter. [17552/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Until 2008, Ireland lost competitiveness as our prices grew ahead of other euro area countries and our wages increased at rates above that justified by our productivity. Our price levels were almost a quarter higher than the euro area average in that year. As has been said for some time there is an urgent need to improve the competitiveness of the Irish economy and this is a job for all in society. While much more needs to be done I am happy to report that in this regard there are already a number of positive developments. Consumer prices in Ireland are now declining at the fastest rate in the euro area and the European Commission now suggests that, uniquely in the euro area, our unit labour costs fell last year when all others rose somewhat. I would point out to the Deputy that (when measured on the same basis) consumer prices fell by 2.4 per cent in the year to March in Ireland but rose by 3.4 per cent in the UK over the same period, almost a six percentage point difference. All these developments will assist addressing our competitiveness problem.

As a member of a currency union we have no control over the exchange rates we face so we must focus on improving competitiveness at home if we expect to be able to maintain and gain export market share. 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 as EU and global growth resumes. I want to assure the Deputy that improving the competitiveness of Ireland's economy is a key priority for this Government.