The Fiscal Advisory Council says the Government should not seek to include proposed new fiscal rules in the Constitution.

The body was established last year to determine whether the Government is meeting its own economic targets.

In a review of proposals to strengthen Ireland's budget making and control systems, the council says fiscal rules should be set in domestic legislation.

The new Fiscal Compact Treaty, to be finalised by EU leaders in Brussels next week, gives member states a choice on whether to incorporate debt reduction mechanisms in their national constitutions or in national legislation.

Enda Kenny has said he hoped the text of the new treaty would be completed at political level at an EU leaders' summit on Monday.

The Taoiseach said progress had been made on issues of concern to Ireland in the drafting process.

Last March, the Department of Finance published a paper on proposals for stronger budgetary rules, which included a rule on the pace of corrections when general government deficits exceed 3% of GDP or the general government debt exceeds 60% of GDP.

A second rule, called the prudent budget rule, would apply when the debt and deficit limits are being met, but when the medium-term objective will be missed.

This would require a minimum adjustment of 0.5% of GDP to bring budgets back in line with the medium-term objective.

A sustainable expenditure growth rule would limit growth in government spending to the underlying nominal rate of economic growth unless there is a corresponding increase in taxes.

The FAC says the rules as drafted lack flexibility, which could lead to unsound policies and damage their credibility.

The council suggests that an enhanced role for an independent fiscal advisory council would help to improve the credibility-flexibility trade off, and strengthen the overall framework.

It recommends that the principles of sound public finances be set out in national legislation.