Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

The Minister is saying that the other rules may change and if they change then they will be subject to this. This is legislation that we are enshrining in Irish law today. Committee Stage has to be decided now. These are the rules that we are saying should apply to this credit line, whatever about what the Minister and the rest of the finance ministers may decide down the line. The point I make is these are not fit for purpose. These do not meet the needs of access to these credit lines because the criteria are too stringent.

While the Minister may make the point that some of those countries I mentioned may achieve a deficit of less than 3% in the upcoming period as the pandemic recedes, let us look at the debt-to-GDP ratio, which is another criterion that has to be met here. It is that the general government gross debt does not exceed 60% of GDP. For example, at the end of last year, that means Belgium is out. Germany is out. Greece is out. Spain is out. France is out. Croatia is out. Italy is out. Cyprus, Hungary, Austria, Portugal, Slovenia, Slovakia and Finland are out because they have all exceeded that criteria. Whatever about reducing your deficit to that level, reducing your debt to below 60% of GDP is not likely to happen in the short term, but then you have the option of reducing it one twentieth per year. If we look at that, for those whose debts exceed 60% of GDP, they must reduce that ratio in two consecutive years and this would in the main be during a downturn. If it was to happen, next year or the year after, that a country needed to access this, it would be during a time when it would be spending a lot on the pandemic and so on. It would be during a time of financial pressure that, to be able to ensure that one can avail of this precautionary credit line, one would have to be reducing one's debt which is the opposite of what one should be doing. We have learnt the lessons from the policy that was followed here after the financial crash and in some other EU member states that this was the wrong thing to do and we are dealing with the pandemic and the impacts of the pandemic in a different way. Requiring countries to reduce their debt over two consecutive years, which, as I said, is likely to be in a downturn, for access to this credit would be a bad and harmful economic policy. Therefore, again, it is not fit for purpose.

Let us take a live example. Let us consider Italy, for the sake of argument. Its debt-to-GDP ratio is currently 156%. What balance would it have to run for two years, most likely during a downturn, in order to access this credit line?