Together we have started to turn the tide to recovery
"We are reforming the political system . . . the people will have their say on the abolition of the Seanad later this year." photograph: dara mac dónaill
The Government is dedicated to working with the people to build on the progress achieved in the last two years
Two years ago, Fine Gael and the Labour Party were given a clear mandate by the Irish people – to take the necessary decisions to achieve economic recovery and to get Ireland working again.
While I acknowledge that we still have a long way to go, it is clear Ireland is headed in the right direction and there is light at the end of this tunnel. Our international integrity and respect for our country have been restored and there is now a clear incentive to build on the progress made.
Two years ago, the economy was in freefall, jobs were being lost by the thousand, our banking system was on the brink and Ireland’s reputation was in tatters. We set out our clear plan for economic recovery and have been working hard to deliver it. Working in partnership with the Irish people, we brought a new stability to the economy and to our public finances.
That plan is working.
The sacrifices of the Irish people are beginning to pay dividends. Confidence is returning. Foreign direct investment by firms is at a 10-year high. The economy has returned to modest growth for two years running. Irish exports are at all-time highs. The flow of investments in new jobs by multinational companies is strong. We have seen the first annual increase in employment since 2008. Long-term Government bond yields are now at less than 4 per cent, down from a peak of more than 14 per cent.
The new stability and confidence have been hard won. To get interest rates down and attract more investment into the economy, we have had to rebuild our international reputation for responsible financial management. Ninety per cent of the fiscal consolidation is complete and borrowing is on target to fall to below 3 per cent of GDP by 2015.
We renegotiated the interest rates on the bailout loans to reduce the long-run cost by €9 billion. By getting rid of the promissory notes and by liquidating Anglo Irish Bank and Irish Nationwide, we have cut our borrowing requirements by €20 billion over the next 10 years.
Other banks have been recapitalised and restructured, with new boards and management teams. The bank guarantee has been ended, some stakes in the banks have been sold, deposits are flowing back and emergency central bank funding is no longer needed.
At the core of the Government’s strategy is the creation of jobs for our people. While the unemployment problem has stabilised, I acknowledge that far too many people cannot find work, or have had to leave the country to get a job. Our aim is to make Ireland, by 2016, the best small country in the world in which to do business and to create jobs.
We protected our 12.5 per cent rate of corporate tax, and cut employers’ PRSI. We have driven implementation of the Action Plan for Jobs designed to make it easier to protect and create jobs, and have recently published a further 330 actions for 2013, including a new subsidy for employers who hire people who have been long-term unemployed.
Banks have been set ambitious lending targets and the Government has put in place a loan guarantee system and micro- finance fund for small businesses that would not otherwise have access to credit. We announced a €2.25 billion stimulus in job-rich public infrastructure projects.