Government and foreign funds ‘a must’ to sustain recovery

The Government and foreign bodies must invest significant funds into the education and housing sectors if Ireland’s stabilising economy is to turn into a full-blown financial recovery.

The verdict was put forward by a senior economic expert yesterday during the first day of Fianna Fáil’s pre-Dáil think-in in Roscommon town.

Speaking during a headline lecture at the conference, Prof Alan Ahearne, head of economics at the National University of Ireland Galway, said clear signs of financial improvement are beginning to emerge across the country.

However, the economist said the only way the situation will result in a genuine, sustained recovery is if public and foreign investment occurs — with the education and housing sectors seen as key areas for the cash injection.

While media were barred from the behind-closed-doors lecture, it is understood Prof Ahearne said current public investment from Government is too low and is failing to take advantage of low interest rates which would allow certain areas to be strengthened by capital funds.

He said using funding from the Ireland Strategic Investment Fund would help to improve the financial clout of the education sector, while more new builds are needed to address a growing housing crisis which has seen prices in some parts of Dublin surge by 28% in a year, which has been caused by supply and demand issues.

Prof Ahearne said the stabilisation of the economy has been based on what he described as an underlying strength in the medical technology, IT, pharmaceutical, agri-food and tourism sectors, coupled with decisive policy actions at home.

However, while acknowledging the role of improving financial circumstances in other nations such as the US and Britain has had on Ireland’s stabilisation, he said the European Central Bank could do more to help support investment in this country.

The lecture was one of a small number of behind-closed-doors presentations to Fianna Fáil members attending the think-in, which almost exclusively involve TDs and Senators.

Among the discussions due to take place later today are the “beef crisis” on Irish farms and gender quotas in Irish politics.