Thank you for this opportunity today to address the Spring lunch of the Dublin region of the Institute. 2003 was a landmark year for you. After 35 years in Nassau House, you have moved to magnificent new purpose-designed premises in the Financial Services Centre. As your local T.D., I welcome you to Dublin 1. It is worth remembering that the world class Financial Services Centre was, only a few short years ago, an idea that was yet to be realised.
The Importance of the Financial Services Sector
The banking and financial services sector, to which you provide qualified professionals, is a hugely important sector in the Irish economy. 50,000 people are directly employed today in the sector and 25,000 more people are employed indirectly in various support services. Your contribution to the continuing economic success of this country is essential.
Direct employment in the IFSC alone stands at around 11,000. Over €200 billion of bank assets are located in the IFSC, not to mention almost €500 billion of international investment funds under administration. Ireland's financial services sector contributes over 5% to annual GDP. The industry today directly contributes about €3.6 billion to the economy.
With a membership of 20,000, the Institute is the leading educational body in Banking and Financial Services in Ireland. It plays a huge role in developing the skills of the people who work in the industry and are its most valuable resource.
The Government is alert to any threats that could damage this vital industry. Our success in the coming years will depend on our ability to effectively combine a high level of education and expertise, knowledge and research, innovation, quality infrastructure and business services. The Government will play its role - through investment, through education, through effective regulation and through international research and marketing. In that context, I would like to acknowledge the role played by the new Irish Financial Services Regulatory Authority and by the IDA.
The Economy
The bedrock of Ireland's success is our strong economy.
We are all aware that the resilience of our economy has been tested in recent years during the global downturn. However, Irelands economy remains one of the strongest in the world. Following the exceptional success of recent years, our economy is adjusting to a more sustainable pace of growth in the medium term of up to 5%. Managing that adjustment successfully is at the heart of the Governments economic strategy.
I am therefore heartened by the ESRIs projections this week that the prospects for acceleration in output growth in 2004 and 2005 remain significant and that inflation will continue to moderate.
In recent weeks, we have seen a number of positive economic indicators.
- inflation is at its lowest level for four years;
- there was a strong pick-up in growth towards the end of last year,
- employment grew by almost 2% last year - thats more than
difficulty;
- the Live Register, released this morning, shows that
- the First Quarter Exchequer figures, also released this morning,
These figures are the envy of our competitors. To put it in perspective:
These indicators demonstrate that the Government's economic
policies are working. They are the right policies for Ireland's future.
They show how prudent policies and the right action by Government, at the right time, can secure the welfare of all of us.
Inflation has been tamed. Growth has been consolidated.
Most important of all, jobs have been safeguarded and our ability to create more jobs has not, so far, been jeopardised.
The Irish people can take credit for this. The best, indeed the only, way to build on this is to remain competitive.
We rely on world markets. We are the most open economy in the world. We rely on growth in our trading partners. That growth is a bit patchy at the moment in some of our main trading partners. Unfortunately, we cannot conjure success on our own. We rely on others.
We have to keep our costs in line with those others.
The exchange rate - which we do not determine - has a key role in how our cost increases translate into how competitive we are worldwide.
I do not want this to sound as if every silver lining has a cloud, but we do need to keep things in perspective. One of our failings 30 years ago was that we perhaps spent our good fortune before we earned it. Let us learn from that and measure our actions and expectations accordingly for the period ahead.
The prospects I have outlined are grounds for confidence in our economy. But they are not grounds for complacency. We need to maintain our prudent policies. We need to ensure that maintaining our competitiveness is central to all that we do.
The world economy is changing. We may lose some jobs, but we can replace them with better jobs. We are one of the most globalised economies in the world and we should have nothing to fear from global competition. We look forward to the enlargement of the European Union as an opportunity.
We have one of the youngest, best educated and motivated populations in Europe. We have low corporate tax rates and an attractive business environment. Our people and our business leaders understand how to serve markets in Europe, the US, Asia and beyond.
We have had a remarkable period of economic and social progress, but we still have ground to make up. Other countries have had decades to build up their economies. Building the Ireland of the 21st century is more ambitious than anything we have ever attempted.
That is why the Government is continuing to invest 5% of GNP each year in upgrading our infrastructure. The Exchequer will spend over €5 Billion on capital projects this year alone. We are making massive public investment in roads, in public transport, in housing, in our energy system, in our hospitals, in our schools and universities, in broadband communications, in science, in research and in the environment.
You can see the progress already - indeed Luas will provide an excellent transport service to your new offices within months.
With the new multi-annual system for capital funding we have now introduced, Ireland will maintain that level of investment for the next five years. There will be no more stop-start. We will be able to plan and to deliver projects for better value and in better time.
Conclusion
For the future, I want to extend my best wishes to Ted McGovern as he takes over the Presidency of the Institute from Aidan Brady. He is coming into office at an exciting time for the Institute as it continues in its role of developing and of expanding banking education in Ireland.
I thank the Institute for your invitation. These are exciting times for your industry and for our country. I wish the Institute continued success as it faces the challenges of the future.
Thank you.
ENDS