Enda Kenny (Mayo, Fine Gael) | Oireachtas source

-----and the Lansdowne Road agreement. In addition, the Department of Public Expenditure and Reform estimates that an average of €400 million of that fiscal space in each year - €2 billion over the next five budgets - is required to meet demographic and other costs that will arise. Taking those factors into account, the net fiscal space that was estimated at budget time was €8.6 billion. In line with the fiscal rules, the European Commission updates each member state's minimum medium-term objectives every three years and the updated medium-term objective to cover the period 2017-2019 is expected in the next week or two. Given the decline in the Irish debt ratio and other factors, it is likely that the minimum medium-term objective proposed by the Commission for Ireland might be slightly less stringent than was previously the case. The Department of Finance has estimated that a structural deficit of -0.5% of GDP rather than the current 0% of GDP is more likely but we will have to await the outcome of all those technical discussions as to what that actually will be. While there are many moving parts to it, a decision to adopt a less stringent medium-term objective would add an estimated €1.5 billion to the indicative fiscal space in total over the period 2017 to 2021 and that would increase the gross fiscal space from €10.9 billion to approximately €12.5 billion and the net fiscal space from €8.6 billion to €10 billion, all other things being equal. The Minister for Finance will spell out further details of that when he is given the updated review by the European Commission.

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