Ireland must respond to American Interest Rate Cut

17th December, 2008

Speaking in the Seanad today Paschal called for Ireland to take action in response to the cut in American interest rates. Following America’s decision, it is likely that the Bank of England will cut its interest rates to a similar level and that central banks across Asia will do the same. The consequences of that upon Ireland’s competitiveness as a country are profound. The value of the dollar and sterling will fall, and the competitiveness of our service and export businesses will come under an assault the like of which they have not experienced in recent years.

Much time has been spent talking about accident and emergency services, school funding, the ability of people to buy homes and so on. All this is predicated on the viability of the Irish economy, which has been based on its ability to be competitive. What happened last night is changing the world so the Irish economy needs to be competitive. Unless we have a single-minded focus on what is required for our country to become competitive, our ability to do all the things we want to do will go out the window. We are beginning to get obsessed with the banks and with holes in public finances, which are easy to understand. The bigger challenge is to confront the massive assault to the competitiveness of our country in reaction to what is happening in the rest of the world.

The anniversary of the first Dail is approaching. The one quality all of the leaders in that Dail shared was an ability to recognise the state of our country at the time and to act upon it. I have to conclude that such a spirt is lamentably lacking in the Government that is in place at the moment.