DUBLIN Dec 9 One-size-fits-all European Union
fiscal rules are constraining badly needed infrastructure
investment in Ireland and creating an increasing problem for the
bloc's fastest growing economy, its finance minister said on
Michael Noonan asked his euro zone counterparts on Monday to
grant Ireland flexibility within the rules to ramp up capital
spending, which ground to a halt during the financial crisis in
a country which also has the EU's fastest growing population.
But they rejected a European Commission proposal to loosen
budget policy for the 19-country bloc next year with a guideline
of an expansion up to 0.5 percent of gross domestic product.
"This country needs a huge investment in infrastructure
(because) we've one big problem. By 2050, a generation away, the
estimate is that the Irish population will be 6.7 million people
as against 4.6 (million) now," Noonan said in a speech on
"At the moment we're constrained unduly by the necessity to
fit within a set of fiscal rules where the same rules apply to
every country in Europe regardless of his state of development
or whether its population is increasing or decreasing."
Ministers on Monday instead agreed that Germany, the
Netherlands and Luxembourg, the EU countries with the highest
budget surpluses, should spend more. Ireland will only balance
its budget by 2018 but it has cut it from a deficit of over 14
percent in 2009.
Noonan, who was speaking at the opening of the European
Investment Bank's (EIB) first permanent office in Ireland, said
Dublin also needed to devise more ways to keep some expenditure
off its balance sheet.
Noonan's department is in discussions with Eurostat, the
EU's statistics office, to clarify whether projects developed
through public-private partnerships, generally used to keep
capital investment off the state's balance sheet, can remain so.
The EIB, the EU's financial arm which has become a key
vehicle for such investments in Ireland, has provided 900
million euros ($950 million) to the Irish economy this year and
expects to provide 1 billion in 2017 - an "enormous" amount
considering the size of the country, its president Werner Hoyer
($1 = 0.9485 euros)
(editing by John Stonestreet)