Written answers

Tuesday, 17 May 2016

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

186. To ask the Minister for Finance when he will confirm a change to Ireland’s medium-term budgetary objective; and if he will make a statement on the matter. [9592/16]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

With the correction of the excessive deficit last year, Ireland's public finances will be now be assessed under the preventive arm of the Stability and Growth Pact. The cornerstone of this fiscal framework is the achievement of the country-specific Medium Term Budgetary Objective (MTO). These budget balance targets are set in structural terms and calculated to ensure the long-term sustainability of the public finances. 

EU Regulation 1466/97 provides (article 2a) for an update of the country-specific MTOs every three years. In terms of process, the European Commission is tasked with producing minimum MTOs for each Member State, and they then set their country-specific MTOs respecting the Commission 'minimum'. Recently the Commission updated the minimum levels at which Member States can set their MTO to cover the 2017 - 2019 period.  

Accordingly, Ireland's minimum MTO for this period has been lowered to a structural deficit of -0.5% of GDP (from 0.0% of GDP) primarily reflecting lower forecast costs associated with ageing. The regulation further provides (article 3.2(a)) that Member States must outline their MTOs in the annual Stability Programme Updates that are submitted to the Commission each April. In the recently published Stability Programme Update, the Government has defined Ireland's MTO as a structural deficit of -0.5% of GDP. It should be noted that the incoming Government may choose to over achieve the MTO.

Comments

No comments

Log in or join to post a public comment.