Brendan Howlin (Wexford, Labour) | Oireachtas source

I think I need to explain this because the new rules are quite complex. The two measures that will underpin whether we meet the rules - the judgment criteria - next year are the expenditure benchmark and the annual structured adjustment. Under the expenditure benchmark, public expenditure can only grow at rates determined by the potential growth of the economy, less a convergence margin if the member state is not at its medium-term objective. We have set our medium-term objective of a structurally balanced budget and we expect to reach it by about 2018. In the interim, we have to make progress towards that at a rate greater than 0.5% of GDP. The ten-year horizon referred to by the Deputy has been renegotiated. It is now a three-year horizon, which suits Ireland better. Obviously, we did not want to be trapped within a horizon that covered the depression years. A horizon of growth potential for the economy that looks at what happened last year and this year will be much more favourable to us in terms of giving us fiscal space.

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