Dáil Éireann Debate, Wednesday - 1 February 2012
30 Deputy Pádraig Mac Lochlainn asked the Minister for Finance, in view of the current deficit and the targets laid down in the EU-IMF programme, his views on whether the proposed 0.5% deficit ceiling outlined in the intergovernmental treaty is an achievable target for this State; when he believes this target will be met; and if in meeting this target significant budgetary adjustments will be required in the years 2015 and 2016. [5656/12]
Amharc ar fhreagraThere are two different deficit targets laid down in the EU/IMF Programme. The first relates to the annual General Government deficit and the second relates to quarterly Exchequer primary balance targets. Neither of these targets is a structural one. The new Treaty requires us to achieve a balanced budget in structural terms, in other words after adjustment for the impact of the economic cycle on the budgetary position. This requirement will be deemed as respected if a structural deficit of 0.5% of GDP is achieved. This target will be converted into a Medium-Term Objective (MTO) and the timeframe for convergence towards the MTO will be proposed by the Commission for each Member State taking into account country-specific sustainability. At this point in time, it would be speculative to put forward a possible timeline for reaching the structural deficit of 0.5 per cent of GDP. My officials will continue to work with the Commission, highlighting the need for commonsense when interpreting the size of the structural fiscal position.
