Bernard Durkan (Kildare North, Fine Gael)
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217. To ask the Minister for Finance the degree to which he and his Department can influence and coordinate fiscal matters in such a way as to support and encourage growth and development throughout the island of Ireland; and if he will make a statement on the matter. [45163/21]

Bernard Durkan (Kildare North, Fine Gael)
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218. To ask the Minister for Finance the extent to which he continues to maintain contact with the relevant authorities in Northern Ireland with a view to achieving maximum cooperation and benefit throughout the island of Ireland; and if he will make a statement on the matter. [45164/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 217 and 218 together.

It is important to state at the outset that I have no direct role in setting fiscal policy in Northern Ireland.

However, enhancing North-South cooperation and supporting the all-island economy is a priority for this Government, as set out in the Programme for Government. This is also articulated in the New Decade, New Approach agreement, in which the Government has made a strong commitment to work with the Northern Ireland Executive and the UK Government in support of greater cooperation, connectivity and opportunity North/South on the island, in line with the Government’s ongoing commitment to the Good Friday Agreement.

I always welcome the opportunity to engage and cooperate with institutions and individuals across Northern Ireland, including through engagement with the North South Ministerial Council (NSMC) established under the Good Friday Agreement. While I was unfortunately unable to attend the most recent plenary meeting of the NSMC which took place in July of this year, I attended the previous plenary in December 2020 which considered the response to COVID-19, the implications of UK withdrawal from the EU and commitments under New Decade, New Approach.

In addition to participating in formal mechanisms for cooperation, I have also enjoyed meeting partners and stakeholders in less formal settings. Most recently, I attended the 2021 British Irish Association conference in Oxford on 4 September, which provided the welcome opportunity to engage once again in person with a range of stakeholders from across the island of Ireland and the UK. I took part in two sessions, speaking first about our economic relations East-West and North-South, and subsequently in a session with representatives of the UK Government and the devolved administrations on working together across the UK and Ireland after the pandemic.

Bernard Durkan (Kildare North, Fine Gael)
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219. To ask the Minister for Finance the degree to which he remains satisfied that Ireland along with its European colleagues continues on a positive trajectory in terms of fiscal policy; and if he will make a statement on the matter. [45165/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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We approach Budget 2022in a much better position than we were this time last year. The economy has recovered rapidly, with the vaccination programme proving extraordinarily successful. However, there will, of course, be long-term effects from the pandemic, particularly in terms of employment.

The most recent Exchequer returns showed a deficit of €6.7 billion was recorded to the end of August this year. This represents an improvement on the same period last year, of some €2.8 billion, although on a 12-month rolling basis, the deficit stands at €9.5 billion.

The year-on-year improvement is primarily down to an increase in tax revenue. Taxes to the end of August are €2 billion over profile, with income tax, corporation tax and VAT performing particularly strongly. On the expenditure side, gross voted expenditure is behind profile by €1.7 billion, although slightly ahead of the same period last year.

A general government deficit of approximately €20 billion, or just over 5 per cent of GDP, was projected in the Summer Economic Statement. Given the over-performance in tax, it is likely that the actual deficit will be lower than this. A revised deficit forecast will be produced as part of Budget 2022.

The fiscal picture in the European Union as a whole is also improving, as the worst impacts of the pandemic recede. In relation to economic growth, the EU Commission forecast GDP growth of 4.8% in 2021 and 4.5% in 2022, both in the EU and the Euro Area. A significant driver of the recovery as been the support shown by EU institutions, most notably via Next Generation EU funding mechanisms and the unprecedented support of the European Central Bank.