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Budget 2018 should not stray an inch from EU fiscal rules – Hayes

Budget 2018 should not stray an inch from EU fiscal rules – Hayes

Brian Hayes MEP said that tomorrow’s budget delivered by Minister Paschal Donohoe should stick firmly to the EU fiscal rules.

 

“As part of the EU fiscal rules, the Irish government has agreed to various targets and benchmarks that ensure we are on a sustainable fiscal path for the years ahead.

“We came through the financial crisis well but we are still dealing with legacy issues, especially in terms of debt and deficit levels. This means that our budgets cannot go overboard on spending or tax cuts; we need to be prudent in how we use the fiscal space available to us. We still have to remember that we are still running a budget deficit, we do not have surplus funds.

“For Budget 2018, we should not stray an inch from the EU fiscal rules. We are on track to deliver a balanced budget next year, a remarkable achievement given that we only exited our bailout programme less than 4 years ago. Any move to go beyond the fiscal rules could put this in jeopardy.

“In Ireland we should embrace the fiscal rules. They have made our economy more stable and helped us get back on the right track after the crisis. No longer can we have giveaway budgets designed to win elections. The fiscal rules ensure that extra spending has to be in line with GDP growth and should be geared towards our Medium Term Objective (MTO).

“Politicians of all parties are blaming the EU and the fiscal rules for what we can and cannot do because of the fiscal rules. This is a cop out. It’s what we in Ireland have agreed to and put into national legislation.

“What many fail to realise is that if we reach a balanced budget by next year, then we will have reached our Medium Term Objective under the fiscal rules. With a balanced budget, we have a great deal of flexibility to spend and ramp up capital investment. But removing our deficit by 2018 has to be the key priority.

“We can’t go back down the route of pro-cyclical fiscal policies. We cannot go back to the old mantra ‘when you have it, spend it’. Guarding our adherence to the fiscal rules should be the priority of every Finance Minister into the future.”

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