24 Apr 2013, 09:33
NUIG economists Prof John McHale and Dr Alan Ahearne yesterday afternoon impressed on the Oireachtas Committee on European Union Affairs the need for bolder monetary and fiscal policy actions at EU level to secure economic recovery.
24 April 2013
Prof John McHale is Head of Economics at the NUIG and Chair of the Irish Fiscal Advisory Council while Alan Ahearne is a Member of the Commission of the Central Bank of Ireland and served as former Special Advisor to the former Minister for Finance, the late Brian Lenihan from 2009 to 2011.
Chairman of the Committee Dominic Hannigan TD said: “We thank both economists for an enlightening insight into the current developments in closer fiscal, banking and economic integration. The Committee was told that the urgent creation of banking union was fundamental to restoration of a more durable banking system Europe-wide. We heard that rigorous stress testing would be required at the outset of any integration process to shore up investor confidence.
“Both economists spoke on the significant steps that have been taken to improve fiscal discipline within the European Union, noting that the rules around fiscal surveillance are complex even for experienced practitioners in the field. It was pointed out however that it was lack of private capital controls rather than fiscal recklessness that caused the difficulties for countries such as Ireland and Spain. We take on board the view that policy change at EU level was required as the social stresses of any further period of recession would be too much to bear, particularly for Southern European citizens.
“Our Committee heard that the current rules-based approach to fiscal discipline are driven by German concerns and it was pointed out that an insistence on austerity at EU level is not in Germany’s interest. Later in the week I meet with Gunther Krichbaum, who chairs the Bundestag’s Committee on EU Affairs, and I intend to raise with him some of the issues discussed at this afternoon’s meeting.”
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