Michael D'Arcy (Wexford, Fine Gael)
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Question 16: To ask the Minister for Finance if the EU has expressed a view on the maximum borrowing levels before penalty clauses might apply to Ireland under the stability pact. [12545/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Article 104 of the Treaty governs the operation of the excessive deficit procedure of the Stability and Growth Pact. On foot of the commission's recent report on Ireland's budgetary position the Commission has now adopted proposals for a Council recommendation to Ireland. This is part of the normal operation of the Pact whenever the General Government Deficit of a Member State exceeds the reference value of 3% of GDP as did that of Ireland and of a number of other Member States in 2008.

The proposed recommendation invites Ireland to reduce the deficit below the 3% of GDP reference limit by 2013. This is in line with the Government's budgetary strategy and we welcome the Commission's stance in this regard.

It is expected that the question of a Council recommendation to Ireland along with recommendations to other Member States in excessive deficit will be considered by the Ecofin Council next month. As is normal in these circumstances, I have been in regular contact with the Commission and with my European colleagues with regard to the position of the public finances.

Council recommendations are intended to support and encourage the Member State(s) concerned in its pursuit of necessary, if difficult, budgetary measures to reduce the deficit below 3% of GDP in a timeframe taking account of the economic background.

We are working with the Commission on this and other matters and as such the question of penalty clauses does not arise.