asked the Minister for Finance if he is satisfied with the performance of the punt as against other currencies, including sterling, and if he has received any representations from business with British interests reporting difficulties since the punt dropped in value from sterling.

The performance of the Irish pound is satisfactory and is consistent with our membership of the EMS. I am not clear as to precisely what business interests the Deputy has in mind in the second part of his question but I have not received any general representations about difficulties arising from the appreciation of sterling. My Department have received a few inquiries about specific exchange risk matters.

Is there any work being undertaken in the Minister's Department to consider the implications of the following scenario: the British pound increasing as against ours; balance of payments difficulties arising here later this year, meaning a general fall of the Irish punt against the other currencies in the EMS and necessitating urgent review with other Finance Ministers of our whole relationship with the EMS and whether we will be able to continue within the EMS? Does the Minister forsee that possibility at this time of the year?

I must confess I am somewhat mystified as to why Deputy O'Leary persists in painting this doom and gloom scenario for which there is no visible evidence at present, or even of a situation that would lead to that. As I have indicated, our currency is performing well and as expected within the EMS arrangement. I have no reason whatever to believe, or any evidence available at present, that the kind of scenario envisaged by Deputy O'Leary is likely to emerge at all.

The Minister has in fact received merely inquiries from Irish industry, that is all?

Yes. It is, I suppose, to be expected that, having broken the link with sterling which had lasted for 150 years, there would be certain teething troubles. But I am not aware from the representations to which I have referred of any basis for anything other than what one might describe as teething troubles. As I have said, the inquiries were about specific exchange risk matters. But there has been nothing of the kind the Deputy envisaged in his question.

And from what the Minister sees of inflationary pressures here at home—which are now generally recognised to be coming out at an annual rate of 12 per cent, way above the inflation rate of any other people in the EMS—he does not see us in any difficulties later this year leading to a serious balance of payments situation?

I am sorry to disappoint the Deputy but the fact is that the relatively——

How does the Minister equate our prospective inflation rate with complacency about the Irish pound in the EMS?

I was about to say that the position in relation to our inflation rate is that there has been an increase recently, due largely to budgetary measures which are one-off. The underlying trend in inflation is not upwards.

On an annual basis it is coming out at 12 per cent.

That is picking out a particular quarter to which I am referring. I am saying that the underlying trend is not upwards. Leaving aside for a moment the question of the impact of oil prices, the indications are that the trend, as we progress in the year, will be downwards. As far as oil prices are concerned, it is not possible to quantify the effects precisely, but one thing one can be reasonably sure of is that whatever effects are likely to occur are also likely to occur to our competitors. Therefore, in the context in which the Deputy is speaking, our relative position will not deteriorate.

Is the Minister aware of the claim of his colleague, the Minister for Industry, Commerce and Energy, in this House—with which I agree—that no other EEC member state has such unique dependence on energy; and that his colleague has already predicted a further increase in oil and petrol products with inflationary results for industry later this year and possibly a third increase later on? On what planet is the Minister presently residing if he does not believe that the possibility of a 12 per cent inflation rate is with us this year bringing with it a revision of our currency as against other EMS currencies?

Firstly, there is no contradiction whatever between what I said and what the Minister for Industry, Commerce and Energy said, and, secondly, I must say again that—I regret it—I must disappoint Deputy O'Leary. The doom and gloom scenario he is envisaging later this year of a balance of payments crisis and devaluation of the Irish currency does not appear to be on. There is no evidence for it at all. It may be disappointing for Deputy O'Leary but that is the fact.

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