LIKELY REFORM of Europe’s Stability and Growth Pact later this year should hold no fear for Ireland, an important new report published today has concluded.
The report on European Monetary Union has been compiled by Fine Gael Senator Paschal Donohoe for the Oireachtas Joint Committee on European Affairs.
The report has investigated the impact of the Stability and Growth Pact on Ireland and has argued strongly that the continuation of a strong – and reformed – pact is very much in the national interest.
The Government commitment to reduce the deficit of the General Government Balance to 3 per cent by 2014, as required under the current pact, is not dealt with as it fell outside the scope of the report.
The report, which has been seen by The Irish Times, also makes the claim that the “new national question is abut how we maintain our prosperity and security [in Ireland]”.
Senator Donohoe has argued that with the absence of tools for adjustment such as exchange rates and interest rates, the pact has assumed a very important role.
He has pointed to governments, including the Irish Government, not paying sufficient attention to the development of structural budget deficits in the past.
“The emergence of a substantial current borrowing requirement . . . is posing massive challenges to our country.
“Any process which reduces the possibility of this happening again in the future should be embraced,” he said.
Senator Donohoe has contended that Ireland has nothing to fear from future reforms of the pact.
“We should be assertive in stating that a pact that allows the national delivery of strong national finances is in our national interest.
“We must also be assertive in stating that the current suggested reforms are a missed opportunity to broaden the measures of economic success,” Senator Donohoe added.
