A FORMER SPECIAL advisor to the late Finance Minister Brian Lenihan and economist at NUI Galway has said that the EU fiscal compact treaty is not a solution to the euro area crisis.
Alan Ahearne was speaking prior to his appearance in front of the Oireachtas European Union Affairs Committee later today where he will give his views on the agreement reached between 25 of the 27 EU leaders in Brussels this week.
The agreement is intended to stop countries running up large budget deficits by limiting what they can spend and enforcing penalties if limits are exceeded. The fiscal compact is currently the subject of much debate about whether or not a referendum is required for it to come into force in Ireland.
The matter is currently being considered by the Attorney General at the request of the government and a decision is due in March.
Speaking on RTÉ’s Morning Ireland, Ahearne said: ”What it does do is that it tightens things in a sense that it makes sanctions automatic and there are some other provisions like that.
“So yes, there is some tightening of fiscal discipline but a lot of the measures we have seen before previously.”
Ahearne said that while it was “a step in the right direction” it is not a sufficient set of measures to solve the overall euro area crisis. He said that once the agreement is in place later this year, there will need to be more done to rectify market fears over other eurozone countries.
“This not a solution to the euro area crisis. This treaty aims at discipline, but it doesn’t go much further beyond that. I would think it is neccessary but it’s not a suffidicent set of measures to solve this crisis,” he said.
The EU Affairs Committee is meeting today between 11.30am and 1.30pm and will hear from Dr Ahearne, as well as the former Attorney General and Commissioner David Byrne, Karl Whelan from UCD and Tom McDonnell from the independent think-tank TASC.
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