Written answers

Wednesday, 23 May 2012

10:00 pm

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 41: To ask the Minister for Finance the extent to which budgetary expectations continue to be met and are in line with targets anticipated in the course of discussions with the Troika; if he will further indicate whether the fiscal and economic performance here compares reasonably well with other countries in the Eurozone; the extent, if any, to which the present trend is likely to be affected negatively or positively by the outcome of the forthcoming referendum on the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union; and if he will make a statement on the matter. [25651/12]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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To date, Ireland has completed six successful quarterly reviews with the Troika, the most recent review mission taking place last month. Last year, Ireland comfortably met all fiscal targets agreed under the Programme, including all cumulative end-quarter Exchequer primary balance and Central Government net debt targets as well as the annual General Government deficit target. Reviews to date have been viewed positively by the Troika. This year, although there are a number of pressure points, I am confident, based on fiscal data for the first four months of the year, that we can adhere to the 8.6% of GDP General Government deficit target based on the Budget day measures.

The European Commission recently released its Spring 2012 European Economic Forecast. It showed that while Ireland's GDP growth of 0.7% in 2011 was lower than the 1.5% growth recorded in the Eurozone as a whole, the situation will be reversed in 2012, with Ireland again projected to post growth albeit modest, while Eurozone GDP is forecast to fall by 0.3%. In terms of budgetary indicators, while Ireland's underlying deficit of 9.4% of GDP in 2011 was well above the Eurozone equivalent, it fell by 1.5% of GDP last year and was well within the limit set by the ECOFIN Council in December 2010. It is also projected to decrease markedly over the coming years.

It is my view that any development that enhances certainty and stability for the Irish economy is to be welcomed. In this regard a positive outcome of the forthcoming referendum will, I believe give confidence to international investors who continue to invest heavily in the Irish economy as evidenced by the FDI announcements already this year. Our firm commitment is to deliver employment opportunities for the Irish people and in order to deliver this, Government needs to enhance our budgetary framework and promote the right climate for business to prosper. Similarly, I believe our return to the international sovereign debt markets will be aided by increased certainty and security that a positive outcome in the upcoming referendum will deliver.

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