Ireland can breach EU spending rules to boost economy...
Ireland will be allowed to breach EU spending guidelines for two years and access significant EU funding ahead of schedule, under an EU-wide financial package to be announced this week.
The package will provide a boost for the government, which is preparing for a major shortfall in the annual tax take. Initial estimates show a 25 per cent decrease in the corporation tax take in 2008 and a shortfall of more than 55 per cent in capital gains tax receipts.
In a briefing with The Sunday Business Post in Brussels, Catherine Day, secretary general of the European Commission, said the commission stimulus package would contain ‘‘concrete and ambitious proposals’’ to help EU member states to deal with the economic crisis.
Day said it was likely that countries would be allowed greater flexibility from the EU Stability and Growth Pact, which limits borrowing by member states to 3 per cent of GDP. The flexibility will be allowed for a two-year period, after which members states would have to revert ‘‘back into discipline’’, according to Day.
But she warned that member states that were already in breach of the 3 per cent figure, including Ireland, would have less flexibility than other countries. The second part of the stimulus package is to ‘‘front-end’’ EU structural and social funds for member states.
Senior commission sources said member states would be allowed to drawdown structural and social funds ahead of target to boost their economies and maintain investment in capital and social projects.
‘‘It is about maintaining demand,” said Day, an Irishwoman who is the European Commission’s highest-ranking civil servant.
Report by By Ian Kehoe - Sunday Buisness Post.
Well it looks like the Irish have learned nothing - it's still borrow, borrow, borrow to spend, spend, spend! Hey let's party on guy's - but eventually reality will bite.
Ireland will be allowed to breach EU spending guidelines for two years and access significant EU funding ahead of schedule, under an EU-wide financial package to be announced this week.
The package will provide a boost for the government, which is preparing for a major shortfall in the annual tax take. Initial estimates show a 25 per cent decrease in the corporation tax take in 2008 and a shortfall of more than 55 per cent in capital gains tax receipts.
In a briefing with The Sunday Business Post in Brussels, Catherine Day, secretary general of the European Commission, said the commission stimulus package would contain ‘‘concrete and ambitious proposals’’ to help EU member states to deal with the economic crisis.
Day said it was likely that countries would be allowed greater flexibility from the EU Stability and Growth Pact, which limits borrowing by member states to 3 per cent of GDP. The flexibility will be allowed for a two-year period, after which members states would have to revert ‘‘back into discipline’’, according to Day.
But she warned that member states that were already in breach of the 3 per cent figure, including Ireland, would have less flexibility than other countries. The second part of the stimulus package is to ‘‘front-end’’ EU structural and social funds for member states.
Senior commission sources said member states would be allowed to drawdown structural and social funds ahead of target to boost their economies and maintain investment in capital and social projects.
‘‘It is about maintaining demand,” said Day, an Irishwoman who is the European Commission’s highest-ranking civil servant.
Report by By Ian Kehoe - Sunday Buisness Post.
Well it looks like the Irish have learned nothing - it's still borrow, borrow, borrow to spend, spend, spend! Hey let's party on guy's - but eventually reality will bite.