Thursday, 22 March 2012

Ceisteanna (63)

Thomas P. Broughan


66 Deputy Thomas P. Broughan asked the Minister for Finance if Dáil Eireann could receive all available technical information from his Department in relation to the debt brake concept in order to assist constituents and the whole community in relation to the forthcoming fiscal compact treaty referendum; and if he will make a statement on the matter. [15987/12]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Minister for Finance)

In relation to the so-called "debt-brake", I assume the Deputy is referring to the automatic correction mechanism that contracting parties to the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union are required to put in national legislation. This automatic correction mechanism is to be based on a common set of principles to be proposed by the European Commission, concerning in particular the nature, size and time-frame of the corrective action to be undertaken. The automatic correction is to be triggered in the event of a significant observed deviation from the country-specific medium-term budgetary objective (MTBO) or the adjustment path towards this MTBO. The Commission has not yet come forward with a set of detailed principles in this regard.

The Deputy will be aware that the fiscal compact contained in this Treaty requires contracting parties to inter alia apply fiscal rules governing balanced budgets over the economic cycle and the pace of reduction in the debt-to-GDP ratio in the event that this exceeds 60 per cent. My Department is currently drafting a Fiscal Responsibility Bill that will cover these requirements and it is intended that this Bill be published ahead of the forthcoming referendum.

Finally, some of the more technical issues associated with fiscal surveillance in the EU are outlined in a Commission document entitled Specifications on the implementation of the Stability and Growth Pact and Guidelines on the format and content of Stability and Convergence Programmes, which may be helpful in this respect and is available on the Commission's website.