the employed - and outsiders - the unemployed. in general, ireland performs well against these recommendations. this is evident from our very good labour market record in the face of general economic weakness in the past few years. ensuring long - term sustainability of the public finances the fifth and final area that i would mention in regard to the lisbon agenda is the issue of pensions and the related risks that this may pose for the public finances in the years ahead. if appropriate measures for dealing with this are not taken in good time, there could be very substantial additional claims on the public finances as well as the risk of pensions being inadequate for a significant proportion of pensioners. all european countries are going to experience a substantial ageing of the population over the next twenty to thirty years. there will be more elderly people and fewer people of working age. there is a three - pronged approach for dealing with this : increasing employment rates and improving productivity performance, reducing public debt before the problem becomes less manageable and, thirdly, reforming pension systems. governments are currently grappling with these big issues. in our own case, we are relatively well placed for coping with these issues. firstly, the ageing of our population is relatively limited compared with countries like italy and spain. secondly, some provision for public pensions is being made through building up the national pension reserve fund by setting aside each year 1 per cent of gross national product. in addition, our economic growth potential is good relative to many other countries, and this increases the capacity for dealing with the issue. nonetheless, there is no scope for complacency for a number of reasons. first, about 40 per cent of the workforce, comprising nearly half of private sector workers, is at present not covered by an employment - related pension or an individual pension. those not so covered will be reliant on the state pension, which provides a basic level of retirement income. a recent estimate of the minister for social, community and family affairs indicated that only about one quarter of private sector workers have near - adequate pensions. consequently, the whole issue must and is being kept under review to ensure that we are in a strong position to deal with the ageing of the population. conclusion the irish economy has performed very well over the past decade or so. our living standards have caught up with those of other advanced countries. this convergence was telescoped into the past decade, whereas other developed countries raised their living standards over a much more prolonged period since the second world war.

john hurley : some perspectives on ireland ’ s and europe ’ s economic performance address by mr john hurley, governor of the central bank and financial services authority of ireland, to the cork chamber of commerce business breakfast, cork, 28 january 2005. * * * introduction it gives me great pleasure to speak to you today. i should first of all like to wish you every success in your year as the european capital of culture. the formal launch of this on 8 january was a most impressive spectacle. like many other areas of the country and, indeed, like the country as a whole, cork has witnessed a great economic transformation over the past decade or two. the cork area is now widely known for its thriving chemicals and pharmaceuticals sector and other high technology businesses. of course, the county of cork continues to be a major producer of agricultural products and this broad sector has adjusted well to changing circumstances. the great modernisation of infrastructure in the cork region is also a clear indicator of very impressive progress. irish economic growth the irish economy ’ s performance over the past decade or so has been very satisfactory. the annual average growth in gross national product, the best measure of our living standards, has been about 6½ per cent a year. this excellent performance has brought our living standards up to those of other developed countries. on a gross domestic product basis, our living standards would be among the highest in the world. however, this is a not a true measure of our living standards, since a significant part of our gdp is repatriated overseas. this reflects the relatively large presence of multi - national companies in the irish economy compared with elsewhere. when based on gnp, our living standards are slightly above the european average and rank sixth, for example, among the twelve euro area countries. economic growth results from increased employment and productivity growth. during the past decade or so, we boosted our employment rate substantially. as a proportion of the working age population, the employment rate increased by about a third from around 50 per cent to the present rate of 66 per cent. this has been a major achievement. ireland ’ s principal economic problem in the past has been our inability to provide employment for a sufficiently large fraction of the population. as a result, we suffered from large - scale involuntary emigration. it is hard to believe that, as recently as the early 1990s, our unemployment rate was in the 15 to 16 per cent range. our excellent employment performance has enabled us to reduce unemployment to its current low rate of 4½ per