The European Commission has given Ireland a favourable report card for undertaking economic reforms but urged further action in some areas.
In its assessment of the progress of EU states in implementing the Lisbon reform programme, the commission yesterday praised the Republic for concluding a recent social partnership deal, increasing public investment in R&D and recognising the need to prioritise spending on infrastructure.
It also said Ireland had shown good evidence of tackling the key issues of labour supply and skills by facilitating migration, and encouraging older people, lone parents and the unemployed into the workforce.
"Ireland combines an already strong economic performance in terms of growth and employment with robust plans for further reform," said the commission, which concluded that Ireland was making "very good progress" in implementing reforms.
However, the assessment of the Government's national reform programme also highlighted two key risks: the disproportionately-sized residential construction sector and evidence of declining external competitiveness.
It urged the Government to prioritise spending to reduce these risks and promote reforms to ensure that sustainable growth could continue and inflationary pressures were reduced.
It pinpoints the revision of Ireland's strategy for tackling climate change as of key importance because it will have to identify further emission-reduction measures to meet its targets under Kyoto protocol.
The report said no progress was reported regarding road pricing or congestion charging despite these issues being mentioned in the national reform plan. It also noted the need for faster reform of pensions, setting up a comprehensive childcare infrastructure and developing a more cohesive policy towards migration and helping migrants to integrate into society.
However, despite some mild criticism, Ireland was singled out as a frontrunner in the EU for economic reforms along with Denmark, Sweden, Finland, Estonia and Luxembourg.
The commission undertook the review of the reform plans of the 25 member states following the past reluctance of several key member states to undertake reforms.
