Standing back for a moment, it is quite perplexing that European and Irish business have shrugged off war in Europe. By last weekend, there had only been a slight sell-off of European bonds.

Did you notice, however, that our currency has been hit by the Kosovo war? Not the Irish pound, but the euro, which fell to $1.07, down 10 per cent since its launch in January. We seem unperturbed by the fall in our euro, unlike falls in the old Irish pound - a fall of 10 per cent in less than three months would have given rise to a lot more anxiety in the old days.

Of course, reasons are given not to worry about Kosovo, to do with the apparent absence of economic strategic interests in the region. No oil, no contagion effect, no significant trading relationships.

Still, war in Europe, not just a military intervention, but conventional war on the European landmass within a few hundred kilometres of our common EU border, is most unusual. There must surely be something wrong with describing the military conflict in Serbia and Kosovo as a crisis, but a crisis which will have no effect on us.

And, by the way, there is still a financial "crisis" in Russia, one of the key political forces historically in Europe. The Russian default last year hit beef farmers in this country. If Russia follows through on last Monday's deal with the IMF, and that deal is connected to a constructive role by Russia in Kosovo, then at least there is some small, benign effect of the war on the Irish economy. Geopolitics do affect us.

If we are complacent about the effect of the war in Kosovo, that is a symptom of a complacent attitude to a lot of economic policy.

A belief is taking hold that we shall solve everything, that there will be no more crises demanding urgent action. There is no longer a fundamental question as to whether we can really cut it as an economy. An identifiable consequence of our recent growth rate is that we are beginning to believe that we are somehow not just a survivor in the international economic game, but a model for others.

Even leaving aside social policy, there is a lot yet to be done. There is actually more still to be done than has already been done. We are not yet a wealthy state in the sense of having a long-established installed base of wealth and wealth-generating enterprises. We have only just begun tax reform.

Despite the breaking of the taboo of privatisation, nothing has been privatised in recent years. There has been a lot of planning so far of the re-structuring of State enterprises, but nothing has been completed yet. The Telecom privatisation is really a flagship event. If it is not successfully carried through, the restructuring of State enterprises will lose momentum.

We are not a model to any state in relation to the speed with which we have liberalised monopolistic services, even if it all arises from EU directives of many years standing. In fact, we are rather late with telecoms privatisation. Again, as has been well-argued recently, there is a huge need for infrastructure investment in the Republic. We have not solved the problem by having reports about it. We have not tapped into private finance by contemplating the possibility of doing so. We are muddling through and putting up with absurd levels of traffic congestion, when, arguably, a more demanding populace would have insisted on change years ago. There will be nothing to congratulate ourselves about until the infrastructure is actually put in place and works.

Are we really a state which Europeans and other peoples point to and say: "I've seen the future and it's called Ireland"? I don't think so. We have not pushed ourselves enough yet and we have not been innovative enough in our thinking. We are only just beginning. We can ill-afford to be complacent about what we have done, or what has happened to us. Perhaps Kosovo is a warning to us to be much more aware of the world around us, and of how the forces at work in it could be a threat as much as an opportunity.

I have no wish to pour cold water on our economic performance or to argue that, despite everything, we are still a tuppence ha'penny, but now lucky, country. But I do wish to see a sense of urgency and alertness about our unfinished work and the wider world, as we seek to build a civilised and prosperous life for our country.

Oliver O'Connor is an investment funds specialist

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