Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

41. To ask the Minister for Finance the extent to which he expects the economy in this country to be affected by a change in economic priorities in Greece or knock-on effect in other eurozone countries; if he is satisfied that this country has made sufficient economic progress to withstand any likely changes; and if he will make a statement on the matter. [4663/15]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The new Greek Government has only just assumed office and is therefore still formulating its policies.

So there remains some uncertainty regarding the likely path that the new Government will take.  This uncertainty has been associated with financial market volatility in Greece, with a decline in equity prices and a sharp spike in bond yields.

Having said that, markets appear to be treating Greece as an outlier rather than a source of contagion.  The reforms implemented during the crisisincluding economic governance reform, progress towards banking union and the establishment of the European Stability Mechanismappear to have reduced the likelihood that turmoil in Greece will spread to other peripheral economies. 

In terms of the exchange rate, while the euro has depreciated significantly against the dollar, this is largely the result of the easing of monetary policy in the euro area (quantitative easing) as well as expectations of a gradual tightening of monetary policy in the US this year.

So, at this stage, the investment community sees Greece as an outlier, which suggests that the enhanced European architecture is working.

In terms of Ireland, we have made significant progress in recent years. We have successfully exited the EU/IMF programme and we have the fastest growing economy in Europe, with an increase of around 85,000 in the total number at work since the low point.

Our debt-to-GDP ratio is now on a declining path. Indeed, our net debt level - at 91 per cent of GDP at the end of last year - means that we are in a relatively healthy position, which is evident from the fact that we can borrow at record low interest rates.

In the most recent Budget we were in a position to invest in public services and to reduce the tax burden on individuals for the first time since the crisis began. So we are making real progress.

The Irish people have made major sacrifices to achieve this economic and financial stability and this must not be taken for granted. This Government will continue to act prudently to ensure this remains the case.