The council, established last year as part of a wider agenda of financial reform, believes that Ireland needs independent fiscal agencies with specific but limited mandates.
Its suggestions come at a time of discussion of major changes in economic governance in the Euro Zone and a commitment by Ireland to introduce new financial rules.
The council calls for well designed, balanced set of rules but it says that new rules drawn up as part of the forthcoming Fiscal Responsibility Bill are not yet sufficient.
“While the proposed rules have many good features, the Council sees a risk that they do not always strike the right balance between prudent management of the public finances and the desirability of pursuing counter cyclical policies. Moreover, the proposed ‘comply or explain’ enforcement mechanism is insufficiently strong,” the report says.
Ireland must publish the Fiscal Responsibility Bill soon as part of its commitment to the European Union and International Monetary Fund rescue programme. That bill will recognise the Council as an independent body.
In that respect it says that the Council needs to be viewed as a body that is both sound in terms of its economic analysis and independent of political influence and members must be qualified professionals with expertise in the areas of macroeconomics and fiscal policy to ensure analytical competence.
It adds that the council should have sufficient resources to allow it to produce and disseminate high quality analysis.
The Council has already been criticised for getting figures wrong in its first Fiscal Assessment Report published last October.
