Dáil Éireann Debate, Tuesday - 3 October 2017
120. Deputy Michael McGrath asked the Minister for Finance when the State is required to achieve its medium-term budgetary objective of a structural deficit of not greater than 0.5% under the domestic and EU fiscal rules; and if he will make a statement on the matter. [41786/17]
Amharc ar fhreagraThe preventive arm of the Stability and Growth Pact (the Pact) does not provide for a specific timeline for when a Member State should achieve its medium term budgetary objective, MTO. The Pact simply provides for an annual improvement in the structural deficit until the MTO is achieved, with this annual improvement governed by the position in the economic cycle and the level of public indebtedness of the Member State concerned.
Since the correction of the excessive deficit in 2015, it has been Government policy to achieve the MTO by 2018. Moreover, the Commission has identified Ireland as being at risk of deviation from the adjustment path toward to MTO in 2016-17. Hence, it is imperative to achieve the MTO in 2018 in order to avoid reputational damage, which inter alia could potentially impact upon our borrowing costs.
Finally, I want to point out that in its Annual Debt Report 2017, published in June, my Department highlighted that public debt per capita in Ireland is one of the highest in the developed world. It is absolutely imperative, in these circumstances, that the MTO is achieved as soon as possible so that we can begin reducing the burden of public debt.
