PRIORITIES: Controlling inflation, getting a grip on Exchequer finances and ensuring the Nice referendum is carried are three clear priorities facing the new Government, according to employer organisation IBEC.

Calling for immediate attention to these issues IBEC chief economist Mr David Croughan said the causes of high inflation needed to be recognised and eradicated.

"Our high rate of inflation, at twice the EU average, was caused by the near double-digit inflation coming through the services sector," he said.

"The danger now is that, in some service sectors and the public sector, rising costs are becoming embedded sources of inflation and are not under control, resulting in a loss of competitiveness in the total economy, which ultimately will show up in lost business and lost employment," he warned.

On the Exchequer finances, he said excessive increases in Government spending suggested "a loss of control that needed urgent correction".

Concern about a serious underlying gap between revenue and spending going foward into 2003 will put a serious question mark over the stability of public finances and threaten crucial infrastructural projects, according to Mr Croughan.

Failure to ratify the Nice Treaty would damage the State's good standing in Europe and undermine the Republic's competitiveness as an investment location, Mr Croughan warned.

"The Government must lead by example by ensuring that its own actions show that Ireland needs to be a fully integrated member of a changing Europe," he argued.