Vol. 490 No. 2
11 Mr. McDowell asked the Minister for Finance the undertaking given to the European Commission and our European partners in relation to budgetary policy and, in particular, in relation to any hitherto unanticipated budget surplus. [9669/98]
The communiqué issued on behalf of EU Finance Ministers and Central Bank governors following the meeting on 14 March 1998 at which the revaluation of the Irish pound's central rate in the ERM was decided included the following statement:
The Ministers and Governors noted the firm resolve of the Irish authorities not to exceed the expenditure commitments in the 1998 budget and to ensure that any revenues above those anticipated in that budget are used to raise the primary surplus, and thus the general government surplus, above the planned figures. Moreover, the authorities are equally resolved to propose a Budget for 1999 having as its primary objective the continuation of low inflation in Ireland.
At what point did the Minister become aware that the Commission and our European partners considered his budgetary strategy pursued in December last was inflationary?
Under the manner in which business proceeds at ECOFIN meetings, every member state's budget is reviewed every year. It is then closed off and a final recommendation is made to a full meeting of ECOFIN. In the recent past, the Deputy may have read of the Italian budgetary performance. The 1997 budget had not been disposed of by 1998 when the 1998 budget was introduced. The Irish situation was reviewed during debates at the monetary committee. The communiqué expressed the form of words which I have just outlined when it came to the March revaluation. This has been the procedure with all other member states' budgets. The monetary committee makes recommendations which are put to the ECOFIN council. Ireland is one of the few countries with an exemplary record in all areas.
The Minister has not answered my question. He is aware of the public perception that the 3 per cent revaluation of the bilateral rates of the punt and the statement he has just read issued on March 14, were dictated by the monetary committee. When did the monetary committee meet to come to the conclusions to which he referred?
The monetary committee meets every month. All matters are discussed at these meetings and the Irish programme for 1997-8 would have been on the agenda for some time. There was not one meeting to discuss the Irish budgetary situation or that of any other member state. There was no homing in on the Irish situation. What was under consideration for some time was the fact that the Irish spot rate of exchange was far from the central rate agreed previously and most other currencies were trading at or near their central rate. That had been discussed in the media and at the monetary committee for a long time. There was nothing surprising about the contents of the communiqué issued on March 14.
I asked the Minister a simple question. When did the monetary committee conclude that his budgetary strategy was inflationary and that we should revalue the bilateral rates? In what way was this communicated to the Minister?
The monetary committee never concluded that the Irish situation was inflationary, nor did it make recommendations about what should happen to the Irish central rate. I have already pointed out that the March revaluation came about as a result of consensus between the Irish authorities and our partners to facilitate a smooth run into next weekend's decision.
As the time for Priority Questions has concluded questions may be taken in ordinary time. The Ceann Comhairle made it clear that Question No. 12 might not be taken if we were outside time for Priority Questions.
I have made my point, a Leas-Cheann Comhairle. If that is the way you wish to order the House there is nothing I can do about it.
The Chair has no control over this matter. It is in Standing Orders and happens on a regular basis.
Question No. 13 is a priority question in the name of Deputy McDowell. Why are we taking this question and not Deputy Noonan's question?
The Chair is obliged to implement the Standing Order which states that if Priority Time is concluded the third question cannot be taken. The third question cannot be taken outside Priority Time. Only the last two questions can be taken outside Priority Time. That is the Standing Order and the Ceann Comhairle referred to it before he left the Chair.
