Dáil Éireann díospóireacht -
Tuesday, 30 Sep 2003

Vol. 571 No. 1

Written Answers. - Stability and Growth Pact.

Dan Boyle

Ceist:

183 Mr. Boyle asked the Minister for Finance the way in which the failure of the French and German Governments to adhere to the terms of the Stability and Growth Pact is being dealt with by the European Central Bank; and if the Government has asked for consistency in the application of the pact. [20939/03]

Minister for Finance (Mr. McCreevy)

I presume the Deputy is referring to the role of the European Commission in relation to the operation of the Stability and Growth Pact, as the European Central Bank has only a very limited consultative role in the process.

The Stability and Growth Pact is implemented by the member states in the ECOFIN Council and the European Commission. In January 2003, the ECOFIN Council decided that there was an excessive deficit in Germany in 2002 and set a deadline of May 2003 for the German authorities to take corrective measures amounting to 1% of GDP. While corrective measures were taken it seems likely that the Germany will again breach the 3% limit in 2003. In June 2003, the ECOFIN Council decided that there was an excessive deficit in France for the year 2002 and set a deadline of 3 October 2003 for France to take corrective action. France is due to submit a report to the ECOFIN Council in early October outlining the measures which it has put in place to reduce its deficit. It is also being forecast that France will breach the 3% limit in 2003.

I believe that the Stability and Growth Pact must be enforced properly. Member states should do all they can to live up to their obligations under the pact. I do not support a general loosening of the rules of the pact. However, I believe that the existing scope for flexibility within the pact should be availed of, where a member state is making earnest efforts to correct an excessive deficit.