1 Feabh 2011, 11:56
A European Union legislative package containing the most comprehensive reinforcement of economic governance in the EU since the launch of the euro will have a major impact on EU member States, a report published by the Oireachtas European Scrutiny Committee today has said.
A new suite of measures proposed by the European Commission consists of six pieces of legislation; four proposals deal with fiscal issues while two regulations are aimed at detecting and addressing emerging macro-economic imbalances within the EU and the euro area. The plans also establish greater and more uniform sanctions for countries in the euro area which breach the new commitments.
The Oireachtas Committee on European Scrutiny carried out a review of these proposals and analysed how they would impact Ireland. As part of the Committee’s deliberations they held a public meeting with the Department of Finance.
The Committee noted that:
The plans will create more onerous obligations in terms of requirements to reduce debt levels.
More stringent penalties, including fines will be imposed on member States who fail to adhere to prudent fiscal policy-making.
Further careful consideration is needed of the new standard of prudent fiscal policy-making as such a plan could have implications in terms of future government spending.
There may be a need to recognise differences between member States such as geographical location in an economic context.
The Committee is concerned that the legislative package could have an adverse impact on Ireland as its main trading partner is the UK which is outside the euro area.
Committee Chairman, Tom Sheahan TD said;
“It must be recognised how far reaching the plans in this legislative package are. Not since the euro was instituted has such widespread reinforcement of economic governance in the EU been introduced. New enforcement measures are foreseen for non-compliant member States in the euro area with the possibility of fines for the culprits.
Overall, the Committee is positively disposed towards the measures. We have seen to our cost in this country how unfettered economics has led to fiscal trouble and economic meltdown. Therefore, tighter regulations to avoid a recurrence are welcomed.
Nevertheless, consideration may need to be given to countries such as Ireland whose major trading partner is a non-euro country and which is located on the geographical periphery of Europe. The “one size fits all” model may not be suitable in all circumstances.”
The report will be forwarded to the Minister for Finance for his consideration and as information when negotiating at EU level.
A full copy of the report is available at www.oireachtas.ie
ENDS
Daniel English
Oireachtas Communications Office
01 618 4484
087 6949926
Committee Membership:
Deputies:
Tom Sheahan, FG, (Chairman)
Michael Creed, FG
Lucinda Creighton, FG
Timmy Dooley, FF
Noel Grealish, Independent
Brendan Howlin, Labour Party
Michael Kitt, FF
Michael Mulcahy, FF
Noel O’Flynn, FF
Aengus O’Snodaigh, SF
Senators:
Paddy Burke, FG.
Terry Leyden, FF
Eugene Regan, FG
Alex White, Labour Party
Paschal Mooney, FF