Ireland can ride out any difficulties - McCreevy

The Irish economy can overcome any problems caused by the international economic crisis, the Minister for Finance, Mr McCreevy has said. Speaking in New York yesterday, he said he saw no convincing reason why the world economy should slip into recession, while also striking an upbeat note on the outlook for Ireland.

According to the Minister, the fundamental strengths of the Irish economy will allow it to surmount "any short term difficulties which international developments may bring."

Speaking to the American-European Association yesterday, Mr McCreevy said that economic growth should average around 5 per cent a year over the coming years. He said that this outlook is based on Ireland's attractiveness as a location for foreign direct investment, the strong growth in labour supply, the specialisation in high-technology sectors and the strength of the indigenous sector.

Mr McCreevy also said that the underlying prospects for the EU economy are good.

Increases in real income, strong employment growth and falling unemployment, as well as the framework for the introduction of the euro framework "are a strong combination to boost consumer and investor confidence and keep the recovery in continental Europe moving forward."

There may be further shocks ahead and more financial market volatility, he said, but even though growth in the developed world will be slower than expected next year, "I can find no convincing reason for an inevitable slide into world recession". Sensible policies "and perhaps a little bit of luck" should mean that the US and Europe can act as growth poles for the world economy. Mr McCreevy is due to arrive in Washington today to join discussions with other Ministers and central bankers.

Already the group of 22, an adhoc collection of industrial countries and emerging market officials, has released its proposals for changes to the global financial architecture. And a financial package to assist Brazil - which may be announced during the meeting following the re-election of President Cardoso - will be the first test of these proposals.

Central to the new proposals put forward to the G22 is the issue of "transparency" in financial dealings. This refers to the need to increase the flow of information to help investors putting money into emerging economies, as well as measures to improve the regulation of the financial sector worldwide and increase the information it supplies to regulators.

Other proposals being considered this week include the provision of extra emergency funding from the IMF and proposals for the World Bank to become involved in so called emergency structural adjustment loans.