The Minister for Finance has published the Fiscal Responsibility Bill 2012.

This Bill sets out the legislation needed to implement the key provisions of articles 3 and 4 of the Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union (Stability Treaty).

The legislation also provides for the establishment of the Irish Fiscal Advisory Council on a statutory basis.

Commenting on the publication, Minister for Finance Michael Noonan said: "The Fiscal Responsibility Bill 2012 provides for the implementation of the fiscal rules set out in the Stability Treaty. These rules are sensible and prudent and represent a responsible approach to budgeting.

"The Government is committed to commencing the passage of the Bill through the Houses of the Oireachtas when the Dáil returns in September. Following the passage of the Bill and its enactment, the Government will be in a position to formally ratify the Stability Treaty."

In May, the Taoiseach said the Bill would ensure no government would be able to “run riot with the people’s fortune”.

The Bill provides for the implementation in national law of articles 3 and 4 of the treaty. The other articles of the treaty are binding obligations under international law that do not require to be reflected in national law.

Article 3 of the treaty requires provision in national law for the fiscal rules set out in that article. These include:

- A commitment by governments that the budgetary position of the general government shall be balanced or in surplus. This is the general policy approach which governments must take.

- Provision for an automatic correction mechanism that will be triggered if there are significant deviations from the budgetary target or the adjustment path towards it.

- Provision is also made for deviation from objectives in the case of exceptional circumstances.

The treaty also requires that there is an independent institution at national level responsible for monitoring compliance with the rules in article 3 of the treaty. The Bill allocates those functions to the Irish Fiscal Advisory Council, which was set up last year, and which will now be put on a statutory basis.

Article 4 of the treaty sets out the debt rule that is already a requirement under the Stability and Growth Pact adopted in late 2011.

This provides that where a member state’s general government debt to GDP ratio is in excess of 60 per cent, the difference between the actual ratio and the 60 per cent threshold must be reduced by an average of one-twentieth per annum.