Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

Exceptional circumstances are provided for under article 3 of the treaty in respect of the budgetary rule. As the debt rule is not similarly provided for, we are reflecting the treaty position in the legislation. The debt rule is based on a three year average, which means it is not as absolute and there is thus less need to include the exceptional rule. I am not sure of the legal position but I assume the fact that it is not written into the treaty offers more flexibility. Under the budgetary rule states must prove that exceptional circumstances have arisen but if the treaty is silent on the debt rule and one decides that exceptional circumstances apply, there will be opportunities to enter into bilateral negotiations with the Commission and a decision by ECOFIN in a slightly looser arrangement.

The analysis by the Central Bank and the fiscal council indicates that if we meet our obligations under the budgetary rule, the debt rule will come right without further specific action. We are basing our work on that assumption at present and we will continue to do so until the evidence suggests we should take a different course of action.