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Stability and Growth Pact.

Dáil Éireann Debate, Thursday - 14 October 2004

Thursday, 14 October 2004

Questions (20)

Ciarán Cuffe

Question:

19 Mr. Cuffe asked the Minister for Finance his views on the opinion of the president of the European Central Bank that the terms of the Stability and Growth Pact should not be relaxed. [24800/04]

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Written answers

The Stability and Growth Pact is an important framework that underpins sound macroeconomic policies within the EU's economic and monetary union and thereby promotes economic growth and job creation. Equally, however, the need for improvements in the workings of the Stability and Growth Pact has been recognised for some considerable time. In response to this need, the European Commission presented a formal communication on 3 September 2004, outlining its proposals for strengthening economic governance and clarifying the implementation of the Stability and Growth Pact.

The Commission's proposals are quite wide ranging and detailed, and the process of discussion and debate is in its early stages. However, some of the proposals are in keeping with Ireland's economic priorities. Ireland has long argued, for example, that countries with low debt levels and with clear investment needs should not be unduly constrained from making the necessary resources available. The Commission proposals represent a move in this direction. I look forward to engaging in a constructive debate with my EU colleagues on this point, and on other proposals for enhancing the Stability and Growth Pact, in the months ahead.

As regards the views of Mr. Trichet, the president of the ECB, he has reportedly stated that the ECB governing council is convinced that substantial improvements in the implementation of the pact would be beneficial and that most of the Commission's proposals in this regard appear to him to be well advised. Mr. Trichet has also reiterated the ECB's view that the 3% deficit limit laid down in the treaty should not be undermined and that changes to the text of the treaty or of the pact's regulations would, therefore, not be advisable.

I have no problems with Mr. Trichet's position. Indeed, at the informal meeting of the eurogroup and the ECOFIN Council on 10 and 11 September 2004, Ministers issued a statement reiterating that the 3% deficit and 60% debt criteria in the treaty were of paramount importance and that any changes to the pact's regulations should be minimised, if necessary at all. The statement also emphasised that Ministers are not looking for a weakening of the pact but rather for strengthening, clarification and better implementation.

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