Thursday 18 January 2018

Deficit falling fast? It's time to tighten belts - by EU law

Brendan Keenan

Brendan Keenan

'I never spot a window of opportunity but I jump right through it," the petty conman Arthur Daley observed in the vintage TV series 'Minder'. Last week, the Irish Fiscal Advisory Council (IFAC) seems to have taken his advice.

There was a certain amount of surprise when IFAC revealed its thinking on the vexed question of EU rules on government spending. This did involve jumping through a political window, since government ministers were already lobbying in Brussels for some relaxation of the rules.

I say "EU rules" because that is where they originally came from. But they are now Irish rules as well, having been put into law under the Fiscal Responsibility Act in 2012. Some of the methodology of setting government spending totals was then also included in amended legislation.

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