Budget 2017: Brussels to cast a cold eye upon €1.3bn of ‘fiscal space’

EU budget rules constrain the Government’s spending plans, regardless of how well the economy is doing.

The Government estimates it has €11.3bn to play with between 2017 and 2021 — what it calls ‘fiscal space’ for tax cuts and spending hikes — €1.3bn of which is to be spent next year. However, the EU says a lot of that money may be eaten up by the maintenance of basic public services and by pressure from unions to restore public pay packets after the crisis.

It has also warned that tax revenues may not be as buoyant as last year, when the corporate tax take surged on the back of a glut of multinationals moving their patents and operations to Ireland.