Sunday 28 August 2016

Noonan says Europe doesn’t need to micro-manage Budget

Published 08/07/2014 | 02:30

Pictured at the Eurogroup meeting of EU eurozone finance ministers were, left to right, Wolfgang Schauble, Finance Minister, Germany and Michael Noonan. Photo: Peter Cavanagh
Pictured at the Eurogroup meeting of EU eurozone finance ministers were, left to right, Wolfgang Schauble, Finance Minister, Germany and Michael Noonan. Photo: Peter Cavanagh

IRELAND should be given greater flexibility from the European Commission in setting the Budget, Michael Noonan has signalled.

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Brussels doesn’t need to pour over every detail of our tax and spending plans, the finance minister said ahead of a meeting of euro zone finance ministers in Brussels yesterday.

His comments come as Italy, which has taken over the six month rotating presidency of the European Union, called for a looser interpretation of the budget rules that European leaders beefed up at Germany’s insistence in 2011 after the scale of Greece’s financial plight became clear.

“In terms of the rules being interpreted to allow national governments to have slightly more discretion over their own budgets, that would be helpful for Ireland,’’ Mr Noonan said.

“We don’t think we need to have the t’s crossed and the i’s dotted on every issue by the European Commission.”

But he stopped short of pinpointing specific areas where more leeway should be given.

The minister has repeatedly said Ireland can meet a crucial EU deficit target by doing less than the planned €2bn adjustment in October’s budget, but he wouldn’t comment on what figure might be required, describing the €200m proposed by IBEC as “guesstimating’’ at this stage.

Mr Noonan said the fiscal rules were designed and implemented “in times of great crisis’’.

Now that that crisis has subsided, they should be revisited, he said. “If that means some flexibility in the interest of jobs and growth in Europe, that would be welcome,” he said.

‘’I don’t expect anything dramatic to happen, but if there’s a move towards flexibility ... then I think that could contribute to the common purpose across Europe now – that European countries’ economies would grow more rapidly and more jobs, particularly jobs for our young people, would be created.’’

EU leaders said at a summit last month that there is room for a more flexible interpretation of the rules, giving a boost to Italian Prime Minister Matteo Renzi, who said his government needed more leeway in order to push through measures to make the Italian economy more competitive.

Mr Renzi, who took office in February, has become an key advocate for flexibility in  applying the so-called Growth and Stability Pact. 

Dutch finance minister and head of the eurogroup, Jeroen Dijsselbloem, said yesterday there was enough flexibility.

He said there was room for flexibility but only on the basis of “real economic reforms”.

“If there are real structural reforms, front loaded, with real impact on the budget, then that could actually allow a country more time, but that will be up to the commission to assess.”

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