Dáil Éireann Debate, Wednesday - 23 May 2012
50 Deputy Thomas P. Broughan asked the Minister for Finance the proposals he is putting to his EU colleagues in the context of a prospective EU stimulus package; and if he will make a statement on the matter. [25622/12]
Amharc ar fhreagraI meet with my EU and euro area colleagues on a regular basis, where we exchange views on a range of issues, including the need to boost growth in Europe. My view is that measures to boost economic growth can play an important role in addressing the current crisis in the EU. Indeed I would point out that the Taoiseach has consistently sought to have growth moved up the European agenda, and I note that this evening the EU Heads of State or Government will have an informal exchange of views on how to boost growth in Europe in advance of the formal European Council meeting in June. It is also worth noting that implementing policies to boost growth in the euro area is one of the key parts of the ‘five-point strategy' to tackle the crisis agreed by the euro area Heads of State or Government last October. My view is that there are a number of ways in which growth rates could be raised in the EU. For instance, implementing structural reforms can have a positive effect in terms of boosting the rate of growth in many Member States and I believe that pursuing such policies within the EU is essential.
In addition, there are calls in some quarters for fiscal measures to stimulate growth in the short term. A number of considerations arise in this regard. For instance, I would point out that fiscal sustainability and measures to promote economic growth are not necessarily incompatible. At the same time, for those Member States subject to market pressures, it is clear that these have little, if any, room for budgetary manoeuvre. It goes without saying, however, that consolidation in these Member States should be pursued in a manner which is as growth-friendly as possible.
It is also important to bear in mind that additional public sector borrowing designed to stimulate the economy in the short-term could increase public indebtedness. This may well act as a restraint on medium term economic growth, thus having a counter-productive impact.
Having said this, I should also mention that it is open to Member States to access funds from the European Investment Bank for infrastructure needs and other investment spending that will boost growth. The Bank has been a valuable source of finance for Ireland for PPPs, the commercial semi-state sector and SMEs in particular. I might add that the Minister for Public Expenditure and Reform and myself met senior officials of the Bank last week to discuss the current pipeline of projects and explore other possibilities for accessing funds. Finally, I believe there is scope to ensure that EU structural funds are better focussed on competitiveness, growth and jobs.
