Commissioner Rehn, presented the following measures taken by Ireland and in line with the EC proposal on economic governance:
· The Irish government's announcement last Thursday of a multi-annual consolidation strategy confirmed the commitment to bringing the deficit below 3% of the GDP by 2014. Commissioner looks forward to the greater degree of detail of consolidation measures which the government intends to provide shortly. These medium-term budgetary objectives and their concrete implementation with expenditure ceilings should become a permanent feature of fiscal policy making in Ireland.
· Ireland kept debt levels well below the 60% of GDP threshold in the first ten years of EMU. This provided some room for manoeuvre at the beginning of the crisis. By contrast, some other Member States ended a long period of benign economic conditions with much higher levels of government debt. This has contributed to the perception of vulnerability since then.
· The most pertinent novelty of our new proposals on economic governance from the Irish perspective is their focus on addressing cumulative and detrimental macroeconomic imbalances.The huge growth in private sector credit and house prices in Ireland would have required pre-emptive and preventive policy action. The unwinding of these imbalances has brought an additional burden of adjustment both here in Ireland and elsewhere.
· Earlier recommendations by the EU to curb these imbalances could have helped to reduce the worst of the excesses before they occurred. Not only that, it would have called for large financial and budgetary buffers to deal with the fall-off in construction-related activity when it occurred.
· The contribution of the private sector to the Irish GDP is no less than 77.5% (or 124 billion euros) in 2009. Ireland has strong economic fundamentals which have delivered economic successes. Taking the necessary structural measures to support fiscal adjustments will pay off in the medium and long term for both sustainable growth and job creation.
© European Commission
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