Mr. Seamus Coffey:

It would not be unique to Ireland. It is a matter of the emphasis or approach taken to have additional scrutiny and perhaps go as far as formal enforcement. The current proposal, as passed earlier in the year, is on the basis of the key benchmarks being the 60% debt-to-GDP and 3% deficit-to-GDP ratios. It is proposed that if countries exceed those, the Commission will look more closely at them. If those countries are exceeding their net spending limits, as set out in their medium-term plans, the Commission will be likely to step in. In the case of countries like Ireland, however, and maybe there are not many in a similarly strong position but a number of countries are not exceeding the 60% debt limit or the 3% deficit limit, the Commission will examine what is happening and perhaps comment on it but will not be likely to go further than that. There would not be formal enforcement, with the Commission saying a country has to introduce measures to get back on the path agreed in the five-year plan, as published at, say, the start of the term of a new government. A country would get a comment rather than be subjected to strict enforcement. If the plans are to be credible and have merit, there should be some form of enforcement. Otherwise, you are simply setting out limits that are not being enforced. If rules are not being enforced, their effectiveness is limited. You want the design of the plan to be taken seriously and to be correct.

Consider what occurs if a plan is not enforced and we just publish it and maybe go back to the annual cycle of budgets we have in Ireland, whereby we do things on a year-to-year basis. The key here is to try to take a more medium-term view by having Departments say that within two, three or four years their budgets will have reached a certain level that will allow them to plan to provide additional services or supports. It is a question of having a more medium-term plan. At present, we have a 12-month budgetary cycle, and it can be even shorter because of various mechanisms like Supplementary Estimates and policy decisions made during the year. The hope is to move to a more medium-term plan that would allow us to say where we are going to get to over the next five years. If medium-term plans are not enforced or lack credibility, maybe owing to difficulties with the numbers that go into them, we just go back to short-term view that has dominated our fiscal system in recent years.