Michael McGrath (Cork South Central, Fianna Fail)
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Question 114: To ask the Minister for Finance the manner in which he believes the fiscal compact agreed at inter-governmental level improves economic governance and budgetary discipline within the EU over and above the updated Stability and Growth Pact measures which came in to effect on 13 December 2011; and if he will make a statement on the matter. [6338/12]

Michael Noonan (Limerick City, Fine Gael)
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The Fiscal Compact is a key part of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union agreed at the end of January. The Compact requires that fiscal rules – covering targets for the structural balance, automatic correction mechanisms, etc – take effect in national law. This is an important provision as it encompasses greater ownership in ensuring the appropriate conduct of fiscal policies at national level.

The Fiscal Compact compliments the already agreed measures taken at EU level, which seek to ensure the pursuit of sustainable fiscal policies in participating Member States. This, in turn, will help ensure a greater level of stability in the euro area and wider EU, which is in all of our interests.

The other parts of the Treaty cover economic policy coordination and convergence as well as improved governance of the euro area.