Concern about the Republic's inflation rate - the highest in the EU - is exaggerated, the chairman of AIB group said yesterday.

Mr Lochlainn Quinn was not "unconcerned" at the rate of price increases but said this had to be seen in the context of the State's overall economic growth.

Governments should consider publishing inflation data for the entire euro zone instead of individually, he said. The publication of separate local figures was "guaranteed" to lead to confusion and dissatisfaction.

"We're in a single currency zone. The inflation rate relates to the management of the currency.

"You would get the impression we are in the middle of a big problem," he said, referring to coverage of inflation.

While this suggested the Government's hands were tied because only the European Central Bank could control interest rates, he said Irish governments had dictated domestic interest rates for only 20 years - after the break with sterling in 1979.

"Even in the 20-year run we had, I guess you would have to say, mixed results."

While accepting there was an element of "tongue-in-cheek" to his comments, he said the Republic's most significant achievement was the creation of de facto full employment.

In an address to the annual lunch of the Small Firms' Association, Mr Quinn cited comparisons of the Irish inflation rate - now exceeding 6 per cent - with that in France and Italy, which was nearer 2 per cent.

But these states had growth rates of only 2 per cent and unemployment rates of about 10 per cent, he said. By contrast, the Republic's growth rate was approaching 10 per cent with low unemployment. "I know which country I'd rather live in."

Afterwards Mr Quinn declined to comment on suggestions the AIB's liability for unpaid DIRT tax might reach some £300 million (€381 million). When asked whether a settlement could be agreed before the Revenue reported to the Dail Committee of Public Accounts in November, he said: "I'm not going to predict. I would hope so."

Audits being conducted by the Revenue Commissioners to assess the liability were not yet complete, he said.

Earlier, the chairman of the Revenue Commissioners, Mr Dermot Quigley, declined to comment on AIB's liability. The Minister for Public Enterprise, Ms O'Rourke, said in an address that just 25 per cent of Irish small firms "have embraced" the Internet and information technology. "In the rest of Europe there's an average of 44 per cent, so we're not much above half."

Ms O'Rourke said she hoped that up to 75 per cent of small Irish companies would have "caught up" in the next year.