asked the Minister for Finance if he will make a statement on the current level of inflation and its comparison with the levels of inflation of our main trading partners.

The rate of inflation for the year to mid-August last, the latest date for which information is available, was 3.1 per cent. This is the lowest rate since mid-November 1967. It compares with an average rate of 3.2 per cent for the EC as a whole which includes rates of 2.4 and 2 per cent for the UK and France respectively. The Federal Republic of Germany registered a slight decline. The comparative US rate was 1.6 per cent.

While welcoming the fact that inflation has come down in line with the drop in inflation all round, which as evident from the Minister's statement is already 2.2 per cent average for the EC——

No, 3.2 per cent.

So we are in line with the average.

We are below the European average.

By 0.1 per cent. The Central Bank projected this year——

It was not the case in 1980.

It is not much consolation when 100,000 have left Ireland.

Would the Minister like to comment on the fact that because of the drop in inflation the real interest rates here at this moment are of the order of 12 per cent and are historically the highest not just here but in any country in Europe, and that those real interest rates are the cause of the major problems of the lack of investment and confidence in this country? Would the Minister like to address himself to the fact that until such time as this problem is resolved any drop in inflation will not of itself solve the problems of investment and employment?

I would love to comment on that. The reality is, as the Deputy knows, that the reason why we have excessively high interest rates is that the Government are borrowing too much because they are spending too much but the Deputy's party every week here on Wednesday night, are putting in motions to get the Government to spend more.

High interest rates are caused by overspending, yet every week they come in here seeking to get the Government to spend ever more, which would drive interest rates up even higher.

Arising from the Minister's very considered reply——

Very truthful reply.

—— which we had no trouble in hearing — at least it got understanding——

I hear Deputy Farrelly in the distance again where he always seems to be. Would the Minister acknowledge that one of the main problems of real interest rates is the fact that this Government have soaked up almost all the available money for investment in this country——

A question.

Would he not acknowledge that the main difference between the interest rate pattern here and in other countries is that this Government have soaked into their maw in securities and gilts every available penny for investment and that that is what has caused the pressure on the interest rates, as any manager in the money market will tell you?

I would like to agree with the Deputy that the Government here are borrowing too much, far too much, yet in the last 12 months the Deputy's party made cumulative promises of public expenditure involving £800 million more borrowing.

The Deputy's party are a party of high interest rates because they are a party of high borrowing.

They made a pig's dinner of it.

Ceist Uimhir a 5.