Michael Noonan (Limerick City, Fine Gael)
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My Department continually monitors a broad range of economic developments and advises accordingly. For instance, in the Stability Programme Update (SPU) that was published in April the impact of alternative scenarios (such as weaker-than-assumed world growth) on the Irish economy and on the public finances was considered.

In relation to the possibility of a Greek exit from the euro area, I recently met with the Governor of the Central Bank to assess the implications of such a development; in addition, the Governor of the Bank and the Head of the NTMA briefed the Economic Management Council on developments. 

It is clear that our trade and investment links with Greece are relatively small; moreover, the architectural improvements in the euro area in recent years should limit the scope for contagion. Having said that, I and my officials will monitor the situation on an ongoing basis.

Furthermore, the euro area Heads of State and Government (HoSG) have agreed that, subject to the Greek authorities implementing legislation in a number of policy areas over the next week or so, negotiations on an ESM programme of financial assistance can begin. This is a positive development and it is to be hoped that the authorities legislate accordingly. Remaining within the euro area is the best way forward for the Greek people.

I am conscious of recent developments in China which, as one of the largest economies in the world, has been a key driver of global growth in recent years. Any slowdown in the Chinese economy could dampen global demand and Ireland could not be immune from such developments. Indeed, the  SPU analysis shows that 1 per cent reduction in world output would have a negative impact on Ireland's output of a similar magnitude, with adverse implications for the public finances. 

Everything else being equal, lower demand from China for various commodities would lead to a reduction in their price.

To provide a buffer should future economic growth surprise on the downside, the Government will continue to implement the necessary structural reforms to increase the potential growth of the economy and continue the improvement in our fiscal position.