Caoimhghín Ó Caoláin
Ceist:72 Caoimhghín Ó Caoláin asked the Minister for Finance the discussions he has had at EU level regarding the Stability and Growth Pact; and if he will make a statement on the matter. [13437/05]
Amharc ar fhreagraWednesday, 27 April 2005
Ceisteanna (48, 49, 50)
Thomas P. Broughan
Ceist:106 Mr. Broughan asked the Minister for Finance the implications of the recent changes agreed to the Stability and Growth Pact; the reasons Ireland was not represented at the meeting of EU Finance Ministers where the changes were finalised; and if he will make a statement on the matter. [13340/05]
Amharc ar fhreagra
Dan Neville
Ceist:117 Mr. Neville 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. [13282/05]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 72, 106 and 117 together.
Agreement on a package of reforms to the Stability and Growth Pact, SGP, was finalised at the ECOFIN Council of 20 March 2005 and endorsed by 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.
Ireland was represented at the relevant ECOFIN meeting on 20 March by senior officials from my Department as I was absent on official business. The final decision on the reform of the pact rests, in fact, with the European Council, which I attended in person on 22 and 23 March 2005.
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. This means that Ireland will be facilitated in sustaining public investment across the economic cycle, in particular, in the event of any future economic downturns. In the current climate of strong domestic growth, the SGP agreement does not entail any particular changes to the Government's policy of sound budgetary management, with continued sustainable improvements in public services.
As regards the capital spending programme, I indicated in my budget for 2005 that I was agreeable in principle to the introduction of a ten year capital envelope for public transport investment. As is normal in such cases, discussions are currently in train with the Minister for Transport on this issue.