asked the Minister for Finance the percentage by which the Irish púnt was devalued against the EMS rate; and the increase in the cumulative foreign debt in all world currencies and in interest payments for the rest of 1983.

13.

asked the Minister for Finance the increase in the Government borrowing requirement this year, including the increase in the total foreign debt as a result of devaluation; and if he will express this as a percentage of GNP.

I propose to take Questions Nos. 12 and 13 together.

As I indicated in my statement to the Dáil on 22 March on the outcome of the EMS realignment, the agreed change in the central rate of the Irish pound against the ECU was a reduction of 3.5 per cent. The Irish pound value of the total Exchequer foreign currency debt outstanding on 21 March 1983 was increased by £276 million as a result of the realignment while estimated foreign interest payments for the remainder of 1983 were increased by £17 million.

As I said in my statement to the House on 22 March, the Government are determined that any increase in debt servicing costs this year will not be allowed to affect the overall budgetary arithmetic and we will closely monitor the trends in the public finances as a whole with a view to taking any necessary action to achieve the budget targets.

Will the Minister note the difference in the figures between the time of devaluation, when the figure he gave was £250 million, and the later figure of £276 million? He will acknowledge there is a difference in the figure he is now quoting and that given on the date of devaluation. Allowing for that difference, what will the impact be on the budget deficit as a percentage of GNP? In his budget statement the Minister indicated that the opening borrowing requirement was more than £2,000 million, which would have been 16.8 per cent. Then he indicated that as a consequence of his budget it would be £1,722 million, or 13 per cent. Would the Minister now acknowledge that as a consequence of devaluation it will be closer to the original figure and that therefore the budget estimates have been driven off target?

On the first part of the Deputy's question I repeat that the figures I have given, £276 million and £17 million are the figures I gave on 22 March in this House. The Deputy is well aware that on an occasion like the realignment meeting, or any other EEC Council meeting, immediately following a decision the effects of decisions taken will necessarily be approximate and therefore take some more time to work out. The Deputy is not on firm ground when he makes particular points on the difference between £250 million and £276 million in circumstances of that nature. As far as the effect of these developments on the current budget deficit is concerned, I have made the point that the Government are determined that the increase in servicing costs will not be allowed to affect the overall budgetary arithmetic and that we will be reviewing trends in public finances on the whole to ensure that the budget target will be adhered to.

Though the Minister may find it blandly reassuring to say that the Government are determined that they will not yield from the overall budget arithmetic, will he tell us how he intends to give effect to that bland reassurance having regard to the impact which this will have on overall budget arithmetic and having regard to the statement by the Minister for Health, for example, that the Estimates for the Department will be well in excess of the original Estimate? In view of that, how can the Minister make the point by way of bland reassurance that the overall budget arithmetic will not be upset?

The issue is not in any way bland. It is evident that a trend of this kind will have to be corrected and the measures taken to bring about that correction will be anything but bland. As the Deputy will appreciate, I am not in a position now to say what the measures will be.

If at this stage trends in public expenditure as a consequence of this decision — the growth in the health Estimate, for instance, beyond what was projected — are clearly running ahead of the Minister's public expenditure targets, will the Minister tell us when and how he proposes to curtail and curb those trends? There has been no evidence of any action up to this point.

The Deputy need not worry himself unduly.

It is the nation that is worried.

I assure the Deputy that measures will be taken.

Does the Minister agree with me that Irish foreign borrowing will be repaid largely in goods and services sold abroad, and therefore that the effect of devaluation on our ability to repay will be greatly reduced? Out ability to pay will be greatly reduced by the fact that we will be earning more £s for goods and services sold abroad, and particularly agricultural goods. Therefore the difficulty about repayments arising out of devaluation is not nearly as serious as it would appear to be.

It does appear serious.

I agree with the general thrust of the Deputy's remarks. There is already evidence that the devaluation which resulted from the realignment and from events since then, is having a positive effect on the capacity of our exporting firms to make progress. To that extent, there should be a positive effect on revenue to the State over a wide area. The effect of a devaluation of this kind properly worked out and taken advantage of by our exporting firms and those competing with imports is not universally negative. Deputy O'Kennedy asked a specific question to which a specific answer can be given. The arrangements for dealing with those differences have to be considered in the light of trends in the economy as a result, among other things, of the beneficial effects of the devaluation.

Does that suggest a supplementary budget?

I am calling the next question. Ceist 14.

14.