Business owners and managers should get ready for a "mini consumer boom" from May 2006, the group chief executive of AIB told the annual dinner of the Small Firms' Association (SFA) yesterday.
Eugene Sheehy said the release of up to €17 billion from 1.2 million SSIA accounts "will have a dramatic and positive effect on our economy".
He said that the impact on the economy as a whole would be "unprecedented, particularly in 2007, when two-thirds of the money will become available in the first four months of the year".
He said the immediate impact would be in areas such as cars, construction and leisure, but the knock-on effect would be spread throughout the economy. He asked the audience of more than 1,100 businesspeople if they were ready to cope with the additional demand.
"Remember, these are cash buyers, not debtors. The businesses that are prepared will be rewarded handsomely with higher sales, larger profits and a growth in market share."
The European commissioner for the internal market and services, Charlie McCreevy, told the business leaders that there was a "wind of protectionism" blowing across Europe, motivated by low economic growth, high unemployment and political pressures. "If Europe goes down that road, it will be to the detriment of us all," he warned.
Mr McCreevy said the European economy was in need of reform, but finding the political will to achieve this was proving difficult.
"Part of the strategy must be to maximise the advantages to Europe of a fully functioning internal market."
The services sector had lagged behind, he said, adding that a fully functioning internal market in services "must be a priority".
He said he shared the view of the National Competitiveness Council that the three main challenges facing the Irish economy were: developing the knowledge economy; recovering cost competitiveness, and improving the regulatory environment for business.
These were matters where action at EU level could play an important role. He said that for Europe to remain competitive, it needed to be able to innovate, but it was not realistic to expect business to invest in research and development if it could not be assured of a realistic return.
"That is why intellectual property rights will play an increasingly important role in a modern dynamic economy," he said.
The commission believes a community patent would be of real benefit to business, but it has proved difficult to get support in the Council of Ministers for the idea. "If they are serious, member states need to get their act together," Mr McCreevy said.
SFA chairwoman Angela Kennedy said that the EU must "urgently" open up the services market.
On the Government's recently announced transport plan, she said the planning and judicial review systems needed to be overhauled or it would "go the way of so many others and gather dust".
Last night, in an address to a KPMG tax conference in Naas, Co Kildare, Mr McCreevy said that EU tax convergence would have a negative effect on the European economy.
