Council Opinion of 31 January 2000 on the updated stability programme of Ireland 2000 to 2002
Date: 2000-01-31
Institutions: Council of the European Union
Subjects: Ireland, economic stabilisation, public finance

C 60/2

EN

Official Journal of the European Communities

2.3.2000

COUNCIL OPINION

of 31 January 2000

on the updated stability programme of Ireland 2000 to 2002

(2000/C 60/02)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July
1997 on the strengthening of the surveillance of budgetary
positions and the surveillance and coordination of economic
policies (1), an in particular Article 5(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

On 31 January 2000, the Countil examined Ireland’s updated
stability programme, which covers
the period 2000 to
2002 (2).

The Council welcomes the record of implementation of the
programme in 1999. The Irish economy continued to expand
rapidly, with real GDP rising by 8,4 % and employment
this very
increasing by about 4,75 %.
favourable economic performance, the projections made for
the improvement
in the budgetary situation were exceeded
by a significant margin. The Council notes with satisfaction
that
the Irish general Government balance remained in
substantial surplus in 1999 and that there was another sharp
decline in the government debt/GDP ratio.

In the context of

Ireland already fulfilled its obligations under the stability and
Growth Pact in 1999. This will continue to be the case in the
period 2000 to 2002. The Council notes that the projected
surplus on the general Government balance, even after taking
account of significant pre-funding of state pension liabilities, is
clearly sufficient in each year to provide a safety margin against
breaching the 3 % of GDP reference value of the Treaty in the
event of normal cyclical fluctuations. The Council notes also
that the Government debt/GDP ratio will decline steadily over
the programme period.

The Council considers the macroeconomic scenario presented
in the updated stability programme to be realistic. However,
the economy is now at an advanced stage of the cycle and
there is a need to use available domestic policy instruments
to address the risk of inflation pressures. In this context, the
Council recalls the recommendations to Ireland provided in the
1999 Broad Economic Policy Guidelines and urges the national
authorities to be ready to use budgetary policy to ensure
economic stability. Given the extent of overheating in the
economy, the Council considers such action to be warranted
in implementing the budget for 2000 and in planning beyond,
while acknowledging the supply side objectives of
Ireland’s
medium-term budgetary strategy.

The Council welcomes the fact that the updated programme
addresses the issue of structural reforms.
the
publication of the National Development Plan 2000 to 2006
responds to the suggestion of the Council for a detailed plan to
meet the physical and human capital needs of the still rapidly
expanding economy, while taking account of an expected
reduction in transfers from the Structural Funds.

In particular,

(1) OJ L 209, 2.8.1997, S. 1.
(2) The stability programme for Ireland 1999-2001 was the subject of a
Council opinion of 18 January 1999 (OJ C 42, 17.2.1999, p. 4).