Roger T. Garland
Question:32 Mr. Garland asked the Minister for Finance whether the Government will have to budget for a surplus in order to meet the criteria for monetary union set out in the Maastricht Treaty.
Written Answers. - EC Economic and Monetary Union.
One of the criteria which will have to be respected before a member state may progress to the third stage of economic and monetary union is that of a sustainable government financial position. A member state shall be regarded as having a sustainable financial position unless there is a Council decision to the effect that it is running an excessive general government deficit.
It will be a matter for the Council to decide in any particular case whether or not an excessive deficit exists. The Commission will monitor the budgetary and debt position in each member state and may initiate the excessive deficit procedure if a member state does not fulfil either of the following criteria: that the planned or actual government deficit exceeds a ratio of 3% of GDP, unless the ratio has declined substantially and continuously and reached a level that comes close to 3% or, alternatively, if the excess over 3% is only exceptional and temporary and that the stock of government debt exceeds 60% of GDP and is neither sufficiently diminishing nor approaching this figure at a satisfactory pace.
It can be seen that the Government will not necessarily have to budget for a surplus to meet these criteria. Indeed, as I have already indicated to this House, Ireland is now ready for economic and monetary union. At a meeting on 10 February last which considered Ireland's economic convergence programme, the ECOFIN Council "welcomed the fact that Ireland at present complied with the objective criteria for the move to the third stage of European Monetary Union".