Paschal Donohoe (Dublin Central, Fine Gael)
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The creation of the rainy day fund forms part of the Government’s policy to stabilise the public finances and increase the State’s resilience to external economic shocks.

The rainy day fund is intended to be used to address severe events as opposed to the normal fluctuations within the economic cycle. However, severe impacts of the economic cycle could be addressed by the rainy day fund.

Deployment of the fund will be subject to Dáil oversight. It is envisaged that the drawdowns from the fund be linked to a force majeureevent such as:

- A natural disaster

- Public emergency

- Other unforeseen one-off occurrences

This approach would align it with the current EU fiscal rules framework.

Regulation (EC) 1466/97 provides that: “In the case of an unusual event outside the control of the Member State concerned which has a major impact on the financial position of the general government or in periods of severe economic downturn for the euro area or the Union as a whole, Member States may be allowed temporarily to depart from the adjustment path towards the medium-term budgetary objective referred to in the third subparagraph, provided that this does not endanger fiscal sustainability in the medium term.”