Written answers

Tuesday, 29 January 2013

Department of Finance

European Stability Programmes

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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To ask the Minister for Finance the supervision process that is imposed on countries who have exited the excessive deficit procedure but who still have over 75% of loans drawn down from the European Financial Stability Facility outstanding; and if he will make a statement on the matter. [4201/13]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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As part of its response to the global economic and financial crisis, the EU has adopted a number of measures. This began with EU 2020, the EU’s growth strategy for the decade which aims to make the EU a smart, sustainable and inclusive economy. This was followed by the European Semester to which was added the Euro Plus Pact and the so-called ‘six-pack’ which came into effect on 13 December 2011. The ‘six-pack’ is the name given to a legislative package, comprising of five regulations and one directive, designed to reform and strengthen the Stability and Growth Pact and to introduce new macroeconomic surveillance. The proposed ‘two-pack’ is a further step in this process and is, to a great extent, a natural extension of the measures contained in the ‘six-pack’. It is applicable to euro area member states only. The first piece of proposed legislation in the two-pack is in relation to ‘the monitoring and assessment of draft budgetary plans and on ensuring the correction of excessive deficits’. The second proposed regulation under the two-pack, is on the strengthening of economic and budgetary surveillance, and sets out explicit rules for enhanced surveillance.

As part of this proposed regulation, a post-programme surveillance process will be put in place and maintained for a Member State until the balance outstanding under EU-sourced financial assistance falls below 25% of the total. This covers all EU funding sources, including bilateral loans. Under the terms of this draft regulation, which is now close to being finalised, the Commission shall conduct, in liaison with the ECB, regular review missions in the Member State under post-programme surveillance to assess its economic, fiscal and financial situation.

The reports generated following such missions shall be considered by the European Council, and the Council, acting by qualified majority on a proposal from the Commission, may recommend to the Member State to adopt corrective measures.

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