Written answers

Thursday, 24 April 2008

5:00 pm

Photo of Dinny McGinleyDinny McGinley (Donegal South West, Fine Gael)
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Question 52: To ask the Tánaiste and Minister for Finance his views on the concerns expressed by the EU Commission about the deterioration in the public finances. [15703/08]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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The European Commission's assessment, based on the update of Ireland's stability programme which was published with Budget 2008, represents a reasonable view of the Irish economy. While it refers to the challenges of a "transition to a period of lower economic growth, mainly linked to a return to more sustainable activity in the housing sector", it also acknowledges the overall strong position of the public finances and that the fundamentals of the Irish economy remain sound. The main recommendations in the related Council Opinion of 4 March 2008 are that Ireland should:

maintain firm control over public expenditures in order to keep the public finances in broad balance;

implement further pension reforms to improve the long-term sustainability of the public finances in view of the significant projected increase in age-related expenditure.

Ireland is in full compliance with the Stability and Growth Pact requirements and the Government is committed to respecting the terms of the pact as the economy adjusts to a period of slower growth. The Government accepts that there can be no unnecessary loosening of fiscal policy and, in that context, the implementation of the National Development Plan remains a key priority. It will help boost the productive capacity of the economy and lay the foundations for future growth. In relation to the area of pensions, the recent Green Paper discusses a range of possible measures and the Government is committed to put in place a pensions system which is financially, economically and socially sustainable.

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