Michael McGrath (Cork South Central, Fianna Fail)
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The General Escape Clause (GEC) of the Stability and Growth Pact was activated in March 2020. The clause allows for a temporary departure from the normal operation of the fiscal rules in a situation where there is a severe economic downturn in the EU. By activating this clause, the European Commission allowed EU Member States to temporarily deviate from their budgetary requirements in order to take necessary measures to effectively address the Covid-19 pandemic. The onset of the Ukrainian crisis introduced additional uncertainty into the economic and fiscal outlook. As such, in the spring of 2022, the application of the GEC was extended to include 2023.

In March 2023, the European Commission published a Communication on fiscal policy guidance for 2024 which confirmed that the GEC would be deactivated at the end of 2023, meaning Member States are now once again subject to the fiscal requirements underpinned by the European fiscal framework.

Notwithstanding this, it is important to note that the EU fiscal framework does not place any limits on public investment, as additional expenditure is always possible provided it is financed by revenue-raising measures or matched by offsetting reductions in current expenditure.

In this context, Budget 2024 announced a record €5.1 billion capital investment in housing this year - made up of €2.6 billion exchequer, €978 million Land Development Agency (LDA) and €1.5 billion Housing Finance Agency (HFA) funding.

As the Deputy is aware, increasing the supply of homes, both public and private, to cater for the housing needs of our citizens remains a key focus for Government under the Housing for All Strategy.