Pearse Doherty (Donegal South West, Sinn Fein)
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Question 24: To ask the Minister for Finance the planned aggregate adjustments that will be made in the economy each year from now until 2015; if he will provide a draft summary of the consolidation plans beyond 2012; if he will provide growth projections for this period; and if he will make a statement on the matter. [5391/11]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 24 and 39 together.

Firstly, let me make clear that this Government believes that sustainable public finances are a pre-requisite for economic stability and growth and we are committed to a determined deficit reduction strategy over the coming years.

The previous Government set out a multi-annual fiscal consolidation strategy in the National Recovery Plan 2011-2014, which projected the General Government deficit being reduced to under 3 per cent of GDP by 2014. While remaining fully committed to reaching the 3 per cent of GDP deficit target, we believe that the appropriate time-scale to achieve this is over the period to 2015. It is important to point out that this additional year had already been provided for by the Ecofin Council agreement of December last and as such is entirely consistent with the views of the EU Commission.

In relation to the budgetary consolidation to be undertaken in each of the years until 2015, the Government intends to adhere to the aggregate fiscal adjustment previously set out for the combined period 2011 to 2012. We believe that this level of consolidation is appropriate and that delivering on these targets will enhance our international credibility.

The details of the level of consolidation which will be necessary in the years 2013 to 2015 are currently being reviewed, in light of emerging economic and fiscal data and the extension of the adjustment period. My Department's view, based on its assessment last November, is for annual average GDP growth of around 2.75 per cent per annum over the period 2011 to 2014. As part of the new EU semester which applies to all Member States, revised economic and fiscal projections will be published with the Stability Programme Update next month. These forecasts will take account of the latest domestic and international data available and will present an assessment of prospects out to 2015.

Of course, all projections are subject to a significant degree of uncertainty and this is why the Programme for Government foresees a review of the progress on deficit reduction in the approach to Budget 2013 in order to ensure a deficit below 3 per cent of GDP is delivered by 2015. This is an entirely sensible position as it will be important to reconsider the scale of the adjustment needed at that stage in the light of the circumstances that pertain.

That said, I would point out that the Government believes that achieving the 3 per cent of GDP deficit is an intermediate step in the process of restoring the public finances and that further reductions in the deficit to GDP ratio will be required thereafter.

The new Government is determined to restore sustainability to our public finances and we will work with our Programme partners to ensure that this is achieved.