Wednesday, 10 July 2019
Department of Finance
As I have stated on many occasions, an undue focus on the concept of fiscal space, which is calculated based on “one size fits all” European rules, is not appropriate for Ireland. Government budgetary policy is correctly formulated based on what is right for the economy given our position in the economic cycle, rather than a narrow, literal interpretation of what is legally permissible under the fiscal rules.
Table A1 of the Summer Economic Statement 2019, sets out an itemised “walk” from the gross fiscal space permitted within the expenditure benchmark pillar of the European fiscal rules to net fiscal space.
Accordingly, the net fiscal space represents the resources net of various pre-commitments and other unallocated resources contained in the indicative budgetary package of €2.8 billion for 2020. However, if utilised this would adversely impact on the headline general government balance.