Press release
Minister Chambers publishes Ireland’s Medium-Term Fiscal and Structural Plan and Draft Budgetary Plan
Published on
Last updated on
Published on
Last updated on
The Minister for Finance, Jack Chambers TD, has today (Tuesday) published Ireland’s Medium-Term Fiscal and Structural Plan and Draft Budgetary Plan 2025 , following approval by Government this morning.
Under the revised fiscal governance framework for the European Union, which came into force on April 30th 2024, Ireland, like all other EU Member States, is obliged to prepare and publish a medium-term fiscal and structural plan (‘medium-term plan’) by mid-October.
While still incorporating annual surveillance, the new governance framework moves towards a more medium-term orientation for budgetary policy. This medium-term focus is operationalised through new multi-annual national medium-term plans with a four or five-year horizon (in line with the length of a Member State’s national legislature).
The medium-term plan, published today, contains technical assumptions for expenditure growth over 2026-2030 in line with those presented in Budget 2025.
As the revised framework allows for plans to be re-submitted when there is a change of government, it is expected that the next government will submit a revised plan following the next General Election.
The Draft Budgetary Plan is a technical accompaniment to the Budget and must be submitted to the European Commission each year by mid-October.
Commenting on the publication of the medium-term plan, Minister Chambers stated:
“The plan published today reiterates that the Irish economy is in a reasonably healthy position. The headline fiscal position has benefited from the post-pandemic recovery of the economy as well as increased revenue flows from the corporate sector in recent years. That being said, I am conscious that the underlying position is markedly less favourable and further progress will need to be made regarding future structural challenges over the medium term.
By publishing and submitting our plan today, the Government is meeting its procedural obligations under the new EU fiscal governance framework, while also conscious that the next General Election will take place in the first quarter of next year at the latest.
Consequently, it will fall to the next Government to produce a revised medium-term plan in due course. The next Government will, of course, have new priorities and new policies.
This plan is prepared accordingly without prejudice to the decisions of the next Government.
Today’s plan does not include provision for the additional capital spending – over €17 billion – to be financed by the AIB share sales and the proceeds of the Court of Justice of the European Union decision of 10th September 2024.
The medium-term plan of the next Government will present more details on the use and timing of the drawdown of this additional investment. ”
ENDS
The EU’s fiscal governance framework is a set of common rules for national fiscal and economic policies which apply to all Member States.
The annual fiscal requirements of the previous framework were suspended in 2020 to allow Member States take required measures during the Covid-19 pandemic. The general escape clause that suspended these requirements remained active until the end of last year.
The main objective of the reform of the framework is to strengthen Member States' debt sustainability, and promote sustainable and inclusive growth through growth-enhancing reforms and investments.
The reform package is made up of the introduction of a new regulation (Regulation (EU) 2024/1263), repealing the previous regulation on the preventive arm (Regulation (EC) No 1466/97), amendments to the Regulation on the corrective arm (Regulation (EU) 2024/1263)) and amendments to the Directive on budgetary frameworks (Directive (EU) 2024/1265).
The Treaty reference values (budget deficit of 3 per cent of GDP and 60 per cent debt-to-GDP ratio) remain unchanged under the revised framework.
Annual fiscal surveillance will be based on a single operational indicator - net primary expenditure growth. This is defined as is defined as general government expenditure net of interest expenditure, discretionary revenue measures, expenditure on programmes matched and/or co-financed by the European Union, cyclical elements of unemployment benefit expenditure and one-off/temporary expenditure items outside the control of government.