Dáil Éireann debate -
Wednesday, 10 Dec 2003

Vol. 576 No. 6

Written Answers. - European Council Meetings.

Eamon Gilmore

Question:

48 Mr. Gilmore asked the Minister for Finance the role he played in the recent meeting of EU Finance Ministers, which decided not to take any action against France and Germany for breaches of the growth and stability pact; the basis on which he decided to cast his vote; his views on the implications of this decision for the future of the pact; and if he will make a statement on the matter. [30084/03]

Joan Burton

Question:

128 Ms Burton asked the Minister for Finance the role he played in the recent meeting of EU Finance Ministers, which decided not to take any action against France and Germany for breaches of the growth and stability pact; the basis on which he decided to cast his vote; his views on the implications of this decision for the future of the pact; and if he will make a statement on the matter. [30249/03]

Minister for Finance (Mr. McCreevy):

I propose to take Questions Nos. 48 and 128 together.

The discussions which took place at the last Eurogroup and Ecofin meetings about the Stability and Growth Pact were particularly protracted. The main issue was essentially procedural. While the Commission put forward its view to proceed with a formal Council notice under Article 104(9) of the treaty, the majority of member states, including Ireland, considered that a more appropriate approach was to secure a commitment from France and Germany to correct their excessive deficits by 2005 at the latest, and to incorporate this agreement within the Council conclusions. I believe this approach has helped to safeguard the pact and secure compliance by both France and Germany with the 3% deficit level. However, it is important to emphasise that there is no difference in substance between the recommendation put forward by the Commission, and the undertaking actually made by France and Germany, regarding the reduction of their respective deficits between now and 2005. In arriving at their decision, the majority of member states took into account the need to achieve the necessary fiscal adjustment in practical terms, particularly in the light of France and Germany's stated willingness to adhere to the Council's substantive view on the matter.

The Commission proposals regarding the move to a formal notice under the excessive deficit procedure are effectively in abeyance and may be reactivated in the future. The performance of both France and Germany will be closely monitored for adherence to the respective commitments undertaken by them.