TWO changes in 1999 would pose a threat to the continued success of Irish tourism, a leading economist said yesterday. Mr Paul Tansey said Brussels would scale down support for the industry; and the abolition of duty-free sales would oblige airlines and car ferries to raise fares.

He told the annual conference of the Irish Tourist Industry Confederation (ITIC) that Ireland could no longer claim to be "a poor relation of a rich family" and support from Brussels would be scaled back accordingly.

Though support for Irish infrastructural projects would not dry up entirely after 1999, there would be less investment cash available - and not just in tourism.

He said the Government would not be able to make good the shortfall from Brussels because its ability to borrow would be constrained by the need to meet conditions for monetary union.

If the abolition of duty-free proceeded on schedule, it would inflict major costs on Irish tourism.

But a more immediate problem was the significant appreciation, in recent months, of the value of the Irish currency against the deutschmark, the franc and the ecu.

Mr Tansey said the pound had strengthened by almost 19 per cent against the deutschmark in the past two years and by over 14 per cent against the franc. Travel industry sources confirmed yesterday that the German market was weak this year.

Mr Tansey predicted great volatility in the foreign exchange markets, in the lead up to 1999.

"It will be like the start of the Grand National." he said.

A partner in accountants Price Waterhouse, Mr Ray Gray, told the conference of concerns that many businesses did not believe that EMU would start on schedule.

He quoted industry surveys showing that fewer than five per cent of Irish companies had assessed the cost or put ill place a plan to deal with EMU.