David Cullinane (Waterford, Sinn Fein)
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304. To ask the Minister for Public Expenditure and Reform the nature of the deviation allowed following the change in the European Commission's budgetary rules (details supplied); the effect this change will have on public capital investment; and if he will make a statement on the matter. [22733/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy should note that the flexibility referred to in his question has in fact been in place since detailed guidance was issued by the Commission in January 2015 to encourage effective implementation of structural reforms that have an upfront budgetary cost in a manner consistent with the Stability and Growth Pact (SGP).  For example, the relevant clause, is discussed in detail in the March 2016 edition of the Vade Mecum on the SGP.

The operation and interpretation of the EU Fiscal Rules is a matter for my colleague, the Minister for Finance.  The Minister in his response to a Parliamentary Question 27531/16 on 29 September 2016 () stated that as far as seeking greater flexibility in the fiscal rules for expenditure on capital investment, Ireland has not yet been in a position to apply in light of the strict conditions governing the application of the relevant provisions of the SGP and given where we are in the business cycle but that the situation is kept under constant review by his officials.

Following the publication of Ireland’s Stability Programme Update (), and in light of the recent European Commission Spring Forecasts (), I understand that the Department of Finance is currently compiling its revised projections for the overall fiscal framework that will govern current and capital spending for the period to 2021 for publication in the Summer Economic Statement in June of this year.

As far as current public capital investment plans are concerned, the Deputy is no doubt aware of the scale of the Government’s commitment to this area under the €42 billion Capital Plan, €27 billion of which is funded by the Exchequer over the period 2016-2021. This substantial investment has been supplemented by a further €5.14 billion, the full allocation of which is being examined by the ongoing Capital Review.  Consequently, gross voted capital expenditure will grow from around €4.2 billion in 2016 to almost €7.3 billion in 2021, an increase of almost three-quarters in public capital investment in just five years. This substantial increase has been achieved through the prudent and responsible approach to fiscal policy which continues to be taken by this Government which has been the linchpin of Ireland’s economic recovery.  Indeed the Commission’s recent forecasts confirm that Ireland is yet again projected to be the fastest growing economy in the EU.