Joan Burton (Dublin West, Labour)
Link to this: Individually | In context

Question 119: To ask the Minister for Finance the details of any agreements to which Ireland and the Exchequer is subject under the stability programme; the extent to which these agreements are legally binding and enforceable; if these agreements are subject to change with agreement of the EU institutions; the mechanisms and procedures for effecting such change; and if he will make a statement on the matter. [35724/09]

Joan Burton (Dublin West, Labour)
Link to this: Individually | In context

Question 120: To ask the Minister for Finance the details of any agreements to which Ireland and the Exchequer are subject under the excessive deficit procedure; the extent to which these agreements are legally binding and enforceable; if these agreements are subject to change with agreement of the EU institutions; the mechanisms and procedures for effecting such change; and if he will make a statement on the matter. [35725/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 119 and 120 together.

I assume that the Deputy is referring to Ireland's obligations under the Stability and Growth Pact (SGP) and in particular the excessive deficit procedure which is governed by Article 104 of the Treaty. Council Regulations Nos.1466/97 and 1467/97 as amended by Council Regulations Nos.1055/2005 and 1056/2005 respectively govern the operation of the pact. These regulations variously set out the requirements in relation to the submission, examination and monitoring of stability programmes and the operation of the excessive deficit procedure. Council Regulation 3605/93 sets out the requirements for the reporting of Government deficit and debt levels. These regulations are binding and directly applicable in all EU member states.

Under the Stability and Growth Pact, member states agree to respect two criteria: a deficit-to-GDP ratio of 3% and a debt-to-GDP ratio of 60%. Where a member state exceeds the deficit criteria and where this is deemed to be neither temporary or close to 3% the excessive deficit procedure is applied by the ECOFIN Council. On foot of Ireland's deficit figures for 2008 the Ecofin Council issued a recommendation to Ireland in April 2009 under which we are required to reduce the general government deficit to below 3% of GDP by end 2013. This is in line with the strategy set out in the April supplementary budget. The full text of the recommendation is available on the Commission website.

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 the 3% reference value within an agreed timeframe, while at the same time taking account of economic circumstances. We are working with the Commission on the Excessive Deficit Procedure and other matters regarding our budgetary strategy. 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. Furthermore, I would remind the Deputy that the Government strategy has been welcomed by the Commission, the ECB and others.

We are committed to acting responsibly in line with the Council recommendation and the priority now is the preparation of budget 2010. I look forward to the continuing support of the Commission and Council for the overall budgetary strategy of restoring stability to the public finances.