Ruairí Quinn
Question:63 Mr. Quinn asked the Minister for Finance his views on the warning by the European Commission on Ireland's budgetary position for 1998; and if he will make a statement on the matter. [12099/98]
Written Answers. - Budgetary Position.
The Deputy may be referring to the comments in the Commission's recommendation for the broad guidelines of the economic policies of the member states and the Community.
In that paper, the Commission stated that the Irish budget position was expected to be one of increased surpluses in the coming years, with the debt ratio falling below 60 per cent of GDP in 1998 and continuing to decline thereafter. It went on to say that "in view of the present strong growth of the economy and the possibility of overheating, any revenues received over and above those anticipated in the 1998 budget should be used to raise the budget surplus. Moreover, a tight fiscal stance is required in Ireland to reduce the risk of overheating". It also noted that "the authorities are resolved to propose a budget for 1999 having as its primary objective the continuation of low inflation in Ireland".
The Deputy will be aware that on a number of occasions I have referred to inflationary pressures in the economy and the need to curtail them. I am determined to ensure that budgetary policy should not add unduly to demand in the economy but that it should help to maintain the price stability which has been a crucial ingredient in our recent economic performance through social partnership.
This stance is consistent with the communiqué issued on behalf of the 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 agreed. In that communiqué it was stated that "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".
Both the broad economic guidelines and the communiqué acknowledged the Government's commitment to a budgetary strategy geared towards maintaining non-inflationary growth. I intend to deliver fully on this commitment.