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Ireland needs to break EU rules in order to build more houses, says Solidarity-PBP

Richard Boyd Barrett said the government needs to declare Ireland’s housing crisis an emergency.

Image: Laura Hutton/Rollingnews.ie

SOLIDARITY-PEOPLE BEFORE PROFIT said the government should breach European spending rules which prevent Ireland from building more social housing.

Speaking at their think-in in Dublin today ahead of the Dáil term resuming next week, the TDs said the rules should be broken in the “interests of the common good”.

The party called out the government for not declaring the housing crisis an “emergency” and criticised it for not approaching the EU to request flexibility in the spending rules in light of the challenges Ireland is facing.

What EU rule says this?

The “expenditure benchmark” is part of a set of EU rules, imposed in a 1997 agreement called the Stability and Growth Pact.

All 28 member states are bound by these rules, as part of their membership of the EU.

As part of trying to keep our finances on a steady footing, the government is constrained by the EU rules (which were incorporated into Irish law in the 2012 Fiscal Responsibility Act) from increasing our public spending from one year to the next, above the rate at which our economy is expected to grow in the medium term.

The spending restrictions essentially apply to all areas of potential public spending, and not just housing, something that Solidarity-PBP acknowledges.

What Solidarity-PBP contends is that this bar on extra spending means the government can’t invest what it needs to build enough social housing to ease the current crisis.

And that includes spending money already in reserve, such as the money in the Ireland Strategic Investment Fund [ISIF] and in NAMA’s cash reserves.

Today, Richard Boyd Barrett said the solution to solving Ireland’s housing crisis is “not complicated”, adding that the EU fiscal rules are preventing the government from ramping up social house builds.

(Can’t see the video, click here)

Ruth Coppinger said it is “ironic” that it would be considered a “problem” for the Irish economy if the government started to put roofs over people’s heads.

“We are told the money is there, but the truth is the EU fiscal rules are constraining this government from spending it. You can’t add to the national balance sheet by building public housing, so what they are doing is they are giving money to what are these so-called off-balance sheet mechanisms, housing agencies etc, building 20 here, 20 there – it is just not going to work,” she said.

Coppinger said it is time for this government to approach the EU and seek flexibility with the rules, and criticised ministers for not doing so already.

Isn’t it interesting that they haven’t even done that yet. Neither Simon Coveney nor Eoghan Murphy have been to the EU and said: ‘We have a housing and homelessness emergency – we need to be able to breach these rules.’
But if you had a left government, we would just breach those rules in the interests of the common good and in the interests of the people.

Boyd Barrett said the seeds of the housing crisis were sown by the Labour-Fine Gael government in 2011 when it wound down the social housing programme, instead relying on the private market to supply housing stock.

“The housing crisis followed,” he said.

(Can’t see the video, click here)

“We have been calling for the government to call this a national emergency and they have refused to do that. That would be the first step towards insisting to the EU that the rules have to be set aside to deal with this housing emergency, and if that doesn’t happen, what is already a disastrous situation is going to get worse.

“And there is not a shortage of money. They money is there in the Strategic Investment Fund, it is there in Nama and it is there in the lost revenue in enormous loopholes in tax avoidance in the area of corporate tax. There is plenty of money. The problem is the ideological aversion of Fine Gael and FF to council housing,” said the Dun Laoghaire TD.

In order to make a dent in Ireland’s housing crisis, Boyd Barrett said the government needs to spend an additional €4.5 billion on housing and acquisitions next year.

In total, he said €10-12 billion needs to be spent on housing over the next five years, in order to deliver over 100,000 houses.

TheJournal.ie has asked the Department of Finance for comment on whether the EU has been approached by Ireland about breaching the fiscal rules. 

Read: President Higgins says homeless people are deprived of freedom and a sense of belonging>

Read: One month out from the Budget, what can we expect?>

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