Economy

Budget watchdog warns EU fiscal rules a ‘disaster’ for Ireland

Success of EU reforms will depend on discipline in domestic budgets – which Ireland has lacked in recent years, said Michael McMahon

The measures, currently making their way through the European Parliament, will require member states to adhere to the budget deficit target of 3 per cent of GDP and the debt target of 60 per cent debt-to-GDP. Picture: Santiago Urquijo

Ireland will be “flattered” by the European Union’s approach to budgetary rules in a way that could be disastrous for the Irish economy, the country’s budget watchdog has said.

New measures making their way through the European Parliament will see governments having to outline their net expenditure projections five years in advance, except in certain circumstances including a change in government.

Michael McMahon, acting chairman of Ifac, said that while the reforms were welcome, the ...