FIANNA FÁIL leader Micheál Martin TD has written to Taoiseach Enda Kenny seeking clarity on six different aspects of the EU fiscal treaty.
In a statement Mr Martin said he wanted to establish whether the treaty provisions would apply to Ireland as soon as it left the EU- IMF-ECB programme at the beginning of 2014 or on January 1st 2016. He said the treaty preamble made it clear that Ireland remained in the programme until the end of 2013, so the provisions of the treaty would not apply during that period.
Mr Martin also sought clarity on the time that would be allowed for Ireland to bring about the reduction in the structural deficit to 0.5 per cent of gross domestic product (GDP) as set out in the treaty.
“Article 3(1)(b) requires countries to ‘ensure rapid convergence’ towards the target. The treaty states that the European Commission will propose the timeframe for the achievement of the 0.5 per cent deficit target. What will be the role of the Irish Government in agreeing this timeframe? Has the Department of Finance modelled a schedule to demonstrate how Ireland will reach this limit and over what timeframe?” he asked.
The Fianna Fáil leader also queried whether the commitment to continuing funding under the programme was now conditional on ratifying the treaty as was the case with access to European Stability Mechanism funds. He also sought clarity on the provision that required countries to reduce the amount by which their debt-to-GDP ratio exceeded 60 per cent by a 20th each year.
“Under current growth assumptions, the Government’s medium-term fiscal statement 2012-2015 estimates that the debt-to-GDP ratio will peak at 118 per cent in 2013. The requirement to reduce the excess by one-20th per annum would necessitate a reduction of 3 per cent in the debt-to-GDP ratio on an annual basis. Clearly, the easiest way of achieving this is to grow the economy,” he said.
