Ireland faces greater budget surveillance
Ireland will face continued surveillance by European authorities, including up to two country visits a year, after it emerges from the bailout, under plans agreed in Brussels yesterday.
Consensus was reached on a key piece of legislation, the “two pack”, which paves the way for greater European surveillance of national budgets.
While the legislation proposes greater economic monitoring of most member states in the euro zone, it also includes specific proposals for countries emerging from a bailout programme. This includes regular review missions to the country to assess its economic situation.
The European Commission and European Central Bank will report back to a European Parliament committee every semester and assess corrective measures. While Ireland is monitored each quarter by the troika, countries such as Latvia and Hungary, which have emerged from a programme, are reviewed twice a year.
Budget day shift
Ireland is likely to shift its budget date from December to October to facilitate the new legislation. Under the proposals, governments are obliged to send their draft budgets to the commission before October 15th each year for examination.
A Department of Finance spokeswoman said the Government is “considering the implications of these provisions for the budgetary process and timeline in the near future”.
The measures are the latest in a series of legislative changes that have increased the role of European authorities in national budgetary decisions. The six-pack rules and the fiscal compact introduced last year solidified the Stability and Growth Pact, allowing for greater co-ordination of economic policy across the zone. The legislation, which specifically applies to the euro zone, is another stage in this policy of greater economic co-ordination.
Under the proposals, which are expected to be signed into law next month, countries exiting a programme will be subject to the enhanced surveillance until a minimum of 75 per cent of the funds they received is paid back. However, this period can be extended if there are “persistent risks on the financial stability or fiscal sustainability of the member state”.
EU economics and monetary affairs commissioner Olli Rehn described the agreement as a “breakthrough” that will allow “a further significant strengthening of economic governance in the euro area”.