Michael McGrath
Question:216. Deputy Michael McGrath asked the Minister for Finance the date by which Ireland must achieve a balanced budget; and if he will make a statement on the matter. [9159/15]
View answerTuesday, 3 March 2015
Questions (216)
Written answers
As a member of the European Union, Ireland is subject to the requirements set out in the Stability and Growth Pact (SGP). One of these is that, until the headline deficit is reduced below 3% of GDP we will remain subject to the corrective arm of the SGP.
From 2016, onwards we will transit to the preventive arm of the Pact, whereby the rules require Member States to adjust sufficiently rapidly towards their medium term budgetary objective (MTO). For Ireland our MTO is to achieve a balanced budget in structural terms. There is no fixed date by which this objective must be met. Rather, the rules stipulate that we must deliver structural budgetary adjustment of at least 0.5 percentage point of GDP per annum until the MTO is achieved.
On the basis of Budget 2015 estimates, a position of structural budget balance is projected to be achieved by 2018. Estimates of the structural budgetary position are based on projections of potential output calculated using the harmonised methodology required by the European Commission.
Updated estimates of the structural budget balance will be published in the context of the forthcoming April 2015 Stability Programme Update.