The Minister for Finance, Mr McCreevy, gave an upbeat assessment of prospects for the Irish economy at the end of the two-day summit of leaders of the world's industrialised nations in Boca Raton at the weekend, writes Conor O'Clery
"There is a great belief that the growth of the world economy is on a more sound footing and that is being reflected in the Irish economic situation as well," Mr McCreevy said.
"The Irish economy seems to be performing remarkably well," he said in an interview. "I don't want to be too optimistic about the Irish situation, just to say we seem to have come through the recession very well: we have unemployment lower than 5 per cent; our public finances are in sound order and so hopefully the upturn in the world economy is going to benefit us as well and we will avail of it.
"We would hope we would have a growth rate in GNP (gross national product) terms for 2004 of 3 per cent - 3.3 per cent in GDP (gross domestic product) terms - which is better than 2003," said Mr McCreevy, who attended the G7 summit as president of the Council of Economics and Finance Ministers of the EU (Ecofin).
Asked about the effect on the Irish economy of the decline in the value of the US dollar, Mr McCreevy said he had always taken the line in speaking about currencies to say as little as possible, but he noted that "volatility or disorderly movements is something which hampers economic growth".
The dollar has lost a quarter of its value against the euro in the last year, making Irish exports to the dollar zone more expensive.
Mr McCreevy was pessimistic about getting agreement soon on spending for the EU budget covering 2007, which the Commission will debate tomorrow. The six major EU countries have called on spending to be held to 1 per cent of EU gross national income but the Commission wants it pushed up to 1.24 per cent to fund enlargement and other developments.
"We intend during the Irish presidency to set out the road map, but it won't be achieved in this presidency - or the next one either," said Mr McCreevy. "It will be well into next year."
Asked if the new EU rules on capital spending to be published shortly by the EU statistics body, Eurostat, would allow him to bring forward big projects like the Dublin metro without breaching EU borrowing rules, Mr McCreevy said the main benefit would be clarity.
"The thing about the new Eurostat rules is that at least people will know with clarity what is going to be counted in and what's going to be not cost-accounted and that's going to be a benefit," he said.
"Each project has to be judged on its prospective merits as to whether it makes financial sense and whether it comes inside euro rules or not. Some of the elements of the Eurostat rules were very restrictive and they were causing a lot of confusion not just in Ireland but in other countries as well. At present in some areas we are not too clear at all and you didn't get a ruling until the project was well over. It should be welcomed by all the EU countries and not just by us."
