DUBLIN (Reuters) – Ireland’s finance minister said on Wednesday he would favour the next government retaining a budget rule that would cap increases in public spending but that it should also allow for larger investments in capital projects.
The government introduced a rule in 2021 to cap increases of combined current and capital spending at 5% a year, although it has broken it for the last three years, with this month’s budget setting total spending 6.9% higher for 2025.
An election must be held in Ireland by March but analysts expect the coalition government to call one for late November. One of the first tasks of the next government will be to prepare a medium-term fiscal plan under the EU’s new fiscal framework.
“I think there will have to be an anchor, it’s important that there is fiscal discipline,” Jack Chambers told reporters, without committing to how a renewed spending rule would be callibrated.
“I think we have to moderate current spending. We can’t have high levels of current and capital spending but obviously the big focus is to have a new era of capital investment for Ireland, to really bridge the infrastructure gaps.”
(Reporting by Padraic Halpin; Editing by Gareth Jones)