NEW rules that would dictate how and where the Government spends taxpayers’ money, with fines of about €300 million for non-compliance, have been put forward by the European Commission.
Described as a “strait-jacket” by some Irish MEPs, they would cover every aspect of the country’s economy from house prices, wages, private and public debt as well as the size of deficit the Government could run.
As well as insisting that the Government’s annual budget could be no more than 3% of GDP in the red, it would enforce a strict debt limit of no more than 60% of GDP, and insist that part of any surplus in good economic times would go towards paying off national debt.
Ireland is heading towards 100% debt, up from 24% three years ago, and an underlying deficit of 11.7% which it must reduce to 3% by 2014, so that sanctions would not kick in until after that.
The proposals also aim to limit the amount of political interference when it comes to imposing fines on countries, making the sanctions quasi-automatic that could only be overturned if a super majority of eurozone states – minus the culprit – voted against.
The European Commission also wants more detail about the budget in advance of it being signed off by the Dáil by including details on the existing extra-budgetary funds, tax expenditure and contingent liabilities.
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