Thank you, hon Speaker. Hon members, the economic slowdown in the eurozone reduces the demand for South Africa's exports, since Europe is one of our major trading partners. Slowing global growth also raises the prospects of weaker commodity prices and constrained government revenue. Increased risk perceptions and financial market turbulence will raise uncertainty and reduce investor risk appetite, contributing to greater volatility of international capital flows and emerging market currencies, including the rand, of course. This raises the potential for large-scale capital outflows and currency depreciations. There is also a risk of increased trade protectionism following a global slowdown as countries attempt to protect their own interests. This would further reduce global growth and could harm South Africa's exports even more.
South Africa's direct economic exposure to those countries at the epicentre of the current market turmoil is reasonably low. Although the European Union is South Africa's biggest trading partner, exports to Portugal, Ireland, Italy, Greece and Spain constitute just about 5% of the total.
Our financial system remains relatively well insulated from the current turmoil, with little exposure to foreign funding. Foreign funding accounts for only 5% of overall bank funding - a small proportion by international standards.
To date, the impact on South Africa has been primarily through falling business and consumer confidence, and financial market variables such as capital flows and the exchange rate. The Medium-Term Budget Policy Statement, MTBPS, proposed an economic support package of R25 billion over the next six years to boost competiveness and promote structural change. This initiative will build on several broader programmes to support growth and employment.
The South African government will continue to call upon European governments and authorities to act more decisively to build the necessary firewalls to prevent the contagion spreading even further and creating increased uncertainty and economic decline across the globe, to make sure that we have endeavours to diversify our trading partners and work with our businesses to promote exports to other parts of the world, and to implement rigorously the plans outlined above to bolster the prospects of growth and job creation. I thank you.