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Dáil Éireann debate -
Tuesday, 10 Jun 2003

Vol. 568 No. 1

Written Answers. - Fiscal Policy.

Seán Crowe

Question:

287 Mr. Crowe asked the Minister for Finance if the possibility of issuing public bonds to fund major capital projects was ever examined by his Department; and if so, the conclusions it drew. [15941/03]

As part of the normal budgetary process, the Government borrows to meet any excess of expenditure over revenue. That includes expenditure arising from Exchequer-funded capital projects. While such borrowing may be funded by the National Treasury Management Agency, NTMA, in a number of ways, the main funding source is the issue of Government bonds.

In addition, the recently established National Development Finance Agency, NDFA, has as one of its functions the provision of advice to State authorities on the optimal means of financing public investment projects to achieve value for money. The options here would include direct Exchequer financing by the NTMA, NDFA financing, whether through the issue of bonds or the taking out of loans, or the establishment of public private partnerships.

Of course, in determining the level of public investment in infrastructure, we must also have regard to our budgetary obligations under the EU treaty and the Stability and Growth Pact. Under the treaty, member states are required to stay within a general government deficit level of 3% of GDP. The Stability and Growth Pact reiterates that deficit requirement and states that member states should keep their general government finances close to balance or in surplus over the medium term.

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