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EU-IMF Programme of Support Issues

Dáil Éireann Debate, Thursday - 18 July 2013

Thursday, 18 July 2013

Questions (182)

Michael McGrath

Question:

182. Deputy Michael McGrath asked the Minister for Finance if he will provide details of the post programme monitoring by the troika which Ireland is expected to be subject to after we exit the current troika programme of assistance at the end of 2013; and if he will make a statement on the matter. [36692/13]

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Written answers

Following approval by member countries and the European Parliament, the “Two-Pack” which contains two regulations entered into force on 30th May 2013. One of the regulations is on the monitoring and assessment of draft budgetary plans and on ensuring the correction of excessive deficits. The other is on the strengthening of economic and budgetary surveillance and sets out explicit rules for enhanced surveillance of countries experiencing or threatened with financial difficulties (Regulation (EU) No 472/2013 of the European Parliament and of the Council of 21 May 2013 on the strengthening of economic and budgetary surveillance of Member States in the euro area experiencing or threatened with serious difficulties with respect to their financial stability). The “Two-Pack” represents a significant and welcome enhancement of the euro area’s economic governance regime. It is, to a great extent, a natural extension of the measures contained in the ‘Six-Pack’ which was introduced on 13 December, 2011. The ‘Six-Pack’ - comprising five regulations and one directive - was designed to reform and strengthen fiscal surveillance under the Stability and Growth Pact and to introduce new macroeconomic surveillance.

The ‘Two-Pack’ is applicable to euro area member countries only.

The surveillance regulation provides for surveillance under a number of circumstances – specifically – where a Member State is experiencing severe difficulties with regard to its financial stability and where this is likely to have adverse spillover effect on other Member States, where a member state is in a macroeconomic adjustment programme, and also post programme surveillance. There are specific features attaching to each of these.

Under the regulation, a post-programme surveillance process will be put in place and maintained for a member country until the balance outstanding under EU-sourced financial assistance falls below 25% of the total. This covers all EU funding sources, including bilateral loans. It also provides that the Commission shall conduct, in liaison with the ECB, regular review missions in the Member State under post-programme surveillance to assess its economic, fiscal and financial situation.

The Regulation provides that the reports generated following such missions shall be considered by the European Council which - acting by qualified majority on a proposal from the Commission - may recommend to the Member State concerned to adopt corrective measures.

Post programme surveillance is a normal feature of IMF assistance programmes, and the new EU regulation provides for a similar arrangement for euro area member states in a post-programme situation.

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