Business Irish

Sunday 22 October 2017

Loosening of EU rules hasn't benefited Ireland - Noonan

Finance Minister Michael Noonan is pushing our case. Photo: Gareth Chaney Collins
Finance Minister Michael Noonan is pushing our case. Photo: Gareth Chaney Collins
Colm Kelpie

Colm Kelpie

Europe loosened strict budgetary rules to allow greater investment, but Ireland hasn't benefited, Finance Minister Michael Noonan has said.

Mr Noonan has said he wants to spend more money on much-needed capital investment, but argued that he's hamstrung by the European Union's fiscal rules, which limit the spending ability of a member state.

He said the Government has been pushing Ireland's case to be allowed to spend more on capital investment, given the requirements in the wake of the recession, but flexibility has been directed at other, larger countries.

"There is some movement already on loosening of the fiscal rules for investment purposes," Mr Noonan said.

"But the flexibility that has been introduced so far hasn't benefited us, and we are continuing at all opportunities, at the relevant European meetings, to stress that an economy like Ireland's, coming out of a deep recession, coming out of a programme, where we have very low investment in capital, needs to beef up the capital investment to grow the economy further."

Mr Noonan has said he is in favour of the fiscal rules, but in the past he has bemoaned their application at European level.

At a conference last year he took a swipe at Europe's statistical agency Eurostat and the European Commission, arguing they need to "straighten out" how they apply the rules.

He claimed larger countries like France and Italy had been given flexibility after they had broken the spending rules, adding the former "gives two fingers to the rules anyway".

He said in its case it was flexibility "to avoid fines and sanctions". At the Oireachtas Budgetary Oversight Committee last week, he said flexibility for investment purposes had been granted to Italy.

"There has been some changes as to the flexibility of the fiscal rules that are applicable for investment," the minister said.

"Countries like Italy have benefited strongly from this but for reasons I needn't get into, what they have done doesn't match Ireland's circumstances and we haven't got a benefit from it yet.

"But we're still knocking on that door and pushing hard and we'll see where it goes," Mr Noonan said.

The commission has in the past agreed to a loosening of the rules in Ireland's case, which resulted in an additional €1.5bn becoming available in fiscal space over future budgets.

Irish Independent

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