Vol. 457 No. 7
93 Mr. D. McDowell asked the Minister for Finance the means of calculating the Exchequer borrowing requirement and the general Government deficit as defined by the European Commission as part of the convergence criteria for European Monetary Union. [16418/95]
The budget deficit normally referred to in Ireland is the Exchequer borrowing requirement. This is a cashflow measurement which identifies the extent to which the Central Fund's current and capital expenditure is not matched by tax revenue or other receipts. The shortfall is met by borrowing. The table on page 98 of the 1995 Budget Booklet sets out the derivation of the EBR outturn for 1994 and of the forecast for 1995.
The Maastricht treaty sets out specific budgetary performance criteria for participation in stage 3 of European Monetary Union. Briefly, the primary tests envisaged are first an annual deficit of no more than 3 per cent of GDP — except in exceptional circumstances; and second a gross debt/GDP ratio of no more than 60 per cent, unless the ratio is "sufficiently diminishing and approaching the reference value at a satisfactory pace".
To ensure comparability across member states the deficit and debt are defined in a Protocol to the Treaty as relating to `General Government'. This is further defined in EU Regulation 3605/93/EC as relates to a national accounts conecpt applied by member states under the second edition of the European system of integrated economic accounts.
