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

I want to make it clear that I and the Government believe in the rules that stem from the Stability and Growth Pact. The issue is that when rules are applied to give bizarre or peculiar results, the application of the rules needs to be examined. For example, technical people in the European Commission looking at migration patterns from 2008 for three years or so, when migration was very strong, came to the conclusion that the Irish population would decline by a million by 2030 and built expenditure loans around that. That is nonsense; it is not going to happen and it is quite clear that population trends now negate that. Some kind of theoretical, bizarre interpretation of economic data cannot be the base for applying the rules. The second issue is that as a general expenditure rule, sovereigns should keep their increase in expenditure below their net growth rates. That gave another bizarre result for us because of the averaging over ten years. There is an argument that for 2016 we must keep our expenditure increase below 0.6% on the basis that the growth average is 0.6%. Quite obviously that is not the current growth rate, and I welcome the paper produced by the Fiscal Council, which casts independent light on this issue. It has moved the expenditure benchmark up to 1.8%, which gives a certain amount of room.

On the last question the Deputy asked, I would hope to see further clarification of this in the spring statement.

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