Written Answers. - Irish Budget Deficit.

Seamus Brennan

Question:

33 Mr. S. Brennan asked the Minister for Finance his views on a recent Economist intelligence unit country report on Ireland which suggests that Ireland could be unfit for Economic and Monetary Union membership due to budget deficits. [6350/96]

I have read the document to which the Deputy refers, and find that the overall tenor of the report does not support this interpretation. On the contrary, the analysis acknowledges that "...the 1995 budget targets have been comfortably met", that the "cautious" 1996 budget "reflects a determination to contain public spending and maintain fiscal discipline in the run-up to European Monetary Union", and that strong economic growth indicates that "job creation will remain high".

The Deputy appears to have in mind a cautionary note struck in a section on pages 5-7 setting out what it describes as the "challenges facing Government policy". Here the authors argue that "... the Government cannot relax its tight fiscal policy". I can assure the Deputy that this Government will continue to pursue fiscal policies which will ensure that Ireland maintains its adherence to the Maastricht fiscal criteria. Our general government deficit has been kept well below the 3 per cent limit since 1988. Our debt to GDP ratio has been reduced from 116 per cent at end-1987 to 85.4 per cent at end-1995 and will fall further to a projected 81.2 per cent at end-1996.