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Dáil Éireann debate -
Wednesday, 28 May 2003

Vol. 567 No. 6

Written Answers. - Stability and Growth Pact.

Thomas P. Broughan

Question:

72 Mr. Broughan asked the Minister for Finance his proposals for a more flexible interpretation by the EU of the Stability and Growth Pact; and if he will make a statement on the matter. [14631/03]

There was a discussion on the rules of the stability and growth pact at the spring European Council on 21 March. No changes were made but some recommendations regarding the effective application of the stability and growth pact were agreed. The main recommendations in this regard were: first that the economic cycle should be taken into account when assessing compliance; second countries with deficits exceeding the close to balance or surplus requirement must improve their cyclically-adjusted budgetary position; third, member states should avoid pro-cyclical policies; and fourth, greater attention will be paid to analysing the long-term sustainability of public finances and greater emphasis will be placed on reducing debt levels and the quality of public finances.

I have made clear on a number of occasions that I would support changes to the pact which would give greater recognition to member states with debt levels below the 60% reference rate especially where such member states have pressing needs for capital investment. This proposal was discussed by the relevant EU bodies but was not proceeded with at this time. The issue will be raised again at ministerial level and I will be setting out my views on the matter as appropriate.

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