Written answers

Wednesday, 1 February 2012

9:00 am

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 79: To ask the Minister for Finance the extent to which economic and fiscal issues occurring over the past five years and deemed to have been a serious obstacle to economic independence have been identified, isolated and addressed, with particular reference to the need for economic recovery; and if he will make a statement on the matter. [5833/12]

Photo of Michael NoonanMichael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)
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Ireland has faced substantial challenges over the past five years as previously accumulated economic, fiscal and financial imbalances began to unwind rapidly. The fallout from this ultimately necessitated a programme of external financial assistance from the EU/IMF. However, since this Government took office we have actively set about addressing the challenges facing the State.

On the banking side, we have recapitalised and restructured the domestic banking system to make it fit for purpose. We have acknowledged the credit problems facing SMEs and established a loan-guarantee scheme. There is also ongoing work with the Troika on the issue of the Promissory Notes.

The Government has stabilised the public finances and placed them firmly on a downward trajectory. We have met the targets set out under the EU-IMF Programme. Indeed, on the deficit target for 2011, we came in at an estimated -10.1 per cent of GDP, well under the -10.6 per cent required. During the summer, in discussions with his European colleagues, the Taoiseach secured a reduction in the interest rate being charged on Programme funding.

Economic growth has returned, led by the exporting sectors and facilitated by inter alia improvements in competitiveness. Notwithstanding considerable uncertainty, all forecasters, domestic and international, expect the economy to continue to grow in 2012. While these are positive developments, the unemployment rate remains unacceptably high. Recognising this, the Government has given top priority to the creation and preservation of jobs including a Jobs Initiative in May 2011. Additionally, my colleague, the Minister for Jobs, Enterprise and Innovation will soon publish an “Action Plan on Jobs”.

So progress is being made on the economy, stabilising the public finances and in the banking sector.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 80: To ask the Minister for Finance if he satisfied at the extent to which economic issues have been addressed within this State in 2011; the extent to which issues effecting this country’s economy at a European level have been identified and resolved; the extent to which economic growth is likely to reflect the changing situation; and if he will make a statement on the matter. [5834/12]

Photo of Michael NoonanMichael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)
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Since this Government took office we have actively set about addressing the challenges facing the State and where relevant, taken issues up at European level. On the banking side, we have recapitalised and restructured the domestic banking system to make it fit for purpose. We have acknowledged the credit problems facing SMEs and established a loan-guarantee scheme. There is also ongoing work with the Troika on the issue of the Promissory Notes.

The Government has stabilised the public finances and placed them firmly on a downward trajectory. We have met the targets set out under the EU-IMF Programme. Indeed, on the deficit target for 2011, we came in at -10.1 per cent of GDP, well under the -10.6 per cent target set by the Troika. During the summer, in discussions with his European colleagues, the Taoiseach secured a reduction in the interest rate being charged on Programme funding.

Turning to the economy, 2011 saw a return to growth for the first time since 2007. Notwithstanding considerable uncertainty, all forecasters, domestic and international, expect the economy to continue to grow in 2012. While these are positive developments, the unemployment rate remains unacceptably high. Recognising this, the Government has given top priority to the creation and preservation of jobs including the launch of the Jobs Initiative in May 2011. Additionally, my colleague, the Minister for Jobs, Enterprise and Innovation will soon publish an “Action Plan on Jobs”.

Obviously as a small open economy whose recovery is being driven by exports, developments in Europe can potentially have serious implications for our growth prospects. As such, resolving the euro area sovereign debt crisis is crucial. In this regard, we are now seeing concerted action to address the weaknesses that have become evident in the design of monetary union. Progress is being made, including through the so-called ‘six-pack’ of legislative reforms as well as the agreement on a ‘fiscal compact’ to ensure fiscal discipline in participating Member States.

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