Budget moves into new EU oversight

This year marked the year that Ireland passed from budgetary oversight under the EU’s excessive deficit procedure into its so-called preventative arm.

The timeline to today’s assessment by IFAC is:

April:

In its so-called spring economic statement, the Coalition unveils plans for a 2016 budget package of between €1.2bn and €1.5bn.

The package it said would be evenly split between measures to cut taxes and increase spending.

June 4:

IFAC puts the Coalition on notice, saying that its plans for a pre-election giveaway budget in October would break the EU’s strict debt-reduction rules.

Even a €1.2bn 2016 budget could fall foul of both the “letter and spirit” of EU budget strictures, said the watchdog.

September 17:

IFAC says the 2016 budget plans will not after all break the EU rules that insist that countries like Ireland rapidly lower their deficits.

This is due to CSO figures showing big growth in the economy.

October 2:

IFAC writes to the Department of Finance endorsing the macroeconomic forecasts underlying the budget 2016 sums.

Midnight Friday, October 9:

Department of Finance releases spending estimates for 2015.

The Irish Examiner reports that the supplementary budget represents the Coalition significantly raising the stakes in its pre-election preparations after disclosing plans to splash an additional €1.5bn in gross supplementary spending across health, transport, education, and social protection, all by the end of this year.

October 13:

On Budget Day, Finance Minister Michael Noonan unveils his 2016 budget.

He details a 2016 budget package of €1.5bn, including cuts in the universal social charge.

November 17:

The EU issues an opinion that Ireland’s 2016 budget is “broadly compliant” with the rules and the various recommendations made by the European Commission.

Today:

IFAC said that the 2016 budget narrowly complied with the EU rules.

But it severely reprimands the Government for its 2015 supplementary budget unveiled last month.