Financial Crisis: International and National Perspectives
Today at NUI Galway (Thursday, 28 June) Irish Minister for Finance Michael Noonan TD, and Canadian Minister for Finance Jim Flaherty MP, addressed a forum entitled ‘Financial Crisis: International and National Perspectives’. The forum was also addressed by Dr Alan Ahearne of NUI Galway and moderated by Professor John McHale.
The event coincides with the awarding of an honorary degree on Minster Flaherty on Friday, 29 June, as well as a meeting of the Irish Fiscal Advisory Council on campus.
This event is being held at a critical time in the financial crisis in Europe, with markets focused on new proposals for a revamped eurozone to be discussed at the EU Summit in Brussels. This forum brings expert opinion into the public domain on where the global financial system and the euro currently stand and on what it all means for the Irish economy. The event also marks the establishment of the Centre for the Study of Irish Economic Policy at NUI Galway.
On speaking about the crisis in the euro and implications for the Irish economy, Dr Ahearne, Director of the new Centre said: “The US is a proper fully-fledged monetary union, as is Canada. But the eurozone is not; it is a collection of distinct sovereign political and financial systems that share a common currency and a crucial underlying cause of the crisis in the euro is the lack a banking union in Europe, which has resulted in a toxic interrelationship between State finances and the banking sector.”
Dr Ahearne added: "EU leaders need to put an end to this terrible game of dominos that has gone from Greece to Ireland to Portugal to Spain and this week to Cyprus. The euro area as a whole is currently solvent, but unless growth resumes then the euro area is heading toward insolvency."
Minister for Finance, Michael Noonan TD: “The Centre for the Study of Irish Economic Policy at NUI Galway is very welcome addition to the Irish academic landscape and I have no doubt that the Centre will play an important role in informing the policy debate in key policy areas for Ireland.
The Irish Economy has returned to growth in 2011 with continued growth forecast for 2012, our public finances are under control and our banks are recapitalized and restructured to focus on lending into the real economy. The financial crisis has severely impacted on Ireland and the Irish people have made huge sacrifices to bring our public finances under control and return the economy to growth. We must continue to take the necessary steps to position the economy so that we can take advantage of global recovery as it emerges.”
The Minister added: “However, significant challenges remain and the ongoing uncertainty in the eurozone is weighing heavily on Ireland’s economic recovery. Decisive action is needed to solve the current crisis and to restore stability and investor confidence in Europe.”
Speaking on the Irish economy, Dr Ahearne, said: “The Government is right to argue that not all the proceeds from the sale of state assets should go to paying down debt. A judicious use of some of these proceeds to incentivise private investment in certain sectors and regions of the country will help boost the domestic economy.”
In his remarks, Canadian Finance Minister Jim Flaherty noted Ireland and Canada share the same constituency at the IMF and World Bank so the two countries work together closely and look forward to continuing to do so.
He highlighted Canada's record and the long term Economic Action Plan it continues to implement to create jobs, growth and long term prosperity. He noted, however, that Canada is part of the world economy, and many obstacles to global recovery remain.
“I am convinced that the countries of the eurozone understand fully the kind of measures that need to be taken, and I urge them to adopt these as quickly as possible,” he said.
“In spite of serious challenges, however, I believe that, given the political will, the necessary decisions will be made, the major difficulties will be resolved and the global recovery will strengthen.”