EU: No room for large rise in budget spending

The Government faces a “substantial fiscal effort” and despite strong economic growth has little room to increase spending beyond what it has planned for the next few years, the European Commission has said in a key report.

And in specific messages to Government on potential tax measures, the Commission said a “gradual” rise in property tax as early as next year would help prevent big increases in bills when the tax is next valued in 2019. The frozen tax is linked to 2013 property prices, but house prices have already increased significantly.

The commission’s report is a major part of its oversight of spending and revenue plans of governments across the EU in shaping national budgets. Its recommendations carry substantial weight and will be pored over by whoever succeeds Michael Noonan as finance minister as the Government prepares to shape the 2018 budget in the autumn.