Simon Coveney
Question:21 Mr. Coveney asked the Minister for Finance if the Irish Presidency has made progress on reforming the Stability and Growth Pact. [18676/04]
View answerWednesday, 23 June 2004
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Written answers
As I have explained previously to the House, Ireland supports it. During Ireland's presidency of the Economic and Financial Affairs Council our priority has been the continued implementation of the pact.
In principle I am in favour of introducing more flexibility into certain aspects of the pact. The general view among my ECOFIN colleagues is that there should be a period of reflection. It would allow us to consider, in a thoughtful and deliberate way, how the EU economic governance system operates. We need to ensure that any proposed changes to the pact are developed on the basis of consensus so that any reforms can command the broad level of support that is required.
The Commission is expected to introduce, in the months ahead, its initiative on improving economic governance in the EU. This will include proposals to improve the workings of the pact. I anticipate that the initiative will contribute to the ongoing deliberations on the matter.
The new constitutional treaty was agreed by the EU Heads of State and Government at last week's meeting of the intergovernmental conference. Certain technical changes vis-à-vis the existing treaty were included. It will have the effect of modifying the operation of the pact subject to the ratification of the new treaty.
Under the proposed new treaty provisions, the Commission will be empowered to bring forward a proposal. The Council can only amend a proposal, by a unanimous decision rather than a recommendation, on the existence of an excessive deficit in a member state. A recommendation can be amended by a qualified majority of the Council. The Council's rules for voting on the issue will also be modified to exclude the vote of the member state in question.
In addition, the intergovernmental conference agreed the text of a declaration on the pact. It includes a reaffirmation of its commitment to the provisions of the pact as the framework for the co-ordination of budgetary policies. The conference agrees that member states should use periods of economic recovery actively to consolidate public finances and improve their budgetary positions to create the necessary room to accommodate economic downturns. The declaration also makes it clear that it does not prejudge the future debate on the pact.