Seymour Crawford
Question:60 Mr. Crawford asked the Minister for Finance the implications of the revised stability pact for Ireland; and if he proposes to change the capital spending plans up to 2009 outlined in budget 2005. [18406/05]
View answerWednesday, 1 June 2005
Questions (56)
Written answers
As the Deputy is aware, agreement on a package of reforms to the Stability and Growth Pact, SGP, was reached at the spring European Council of 22-23 March 2005. The new measures underline the continued European commitment to fiscal discipline, while acknowledging the need for economic realism, for example, by allowing member states more time to correct excessive deficits in circumstances where economic growth is at a depressed level. The requirement to avoid deficits in excess of 3% of GDP is retained, and member states have stepped up their commitment to reduce debt levels and to strengthen long-term budgetary sustainability.
One of the key objectives of the discussions from Ireland's point of view was the need to recognise the important role played by public investment to support economic development. The Council report indicates that the medium-term objective of budgetary policy should reflect economic circumstances, so that countries with low debt and high potential growth — such as Ireland — can have more budgetary flexibility, in particular taking into account the needs for public investment. The extent to which this is done will depend on the economic circumstances which underpin budget 2006 and the subsequent budgets which will be presented to the House for approval in the normal course.