Mr. John Palmer:

I think the Deputy is working off the original information note that was issued prior to ECOFIN's first reading. At that point, the original text as proposed by the Commission only had the independent body option. In the first reading, Ireland, together with several other member states, managed to convince the Council that this was a bit restrictive, and the text adopted by the Council states "independently produced or endorsed". There was a concern that should an independent body produce, for example, a very optimistic forecast, this would put us in a difficult position in which we would be required to base our budgetary forecasts on what we viewed as an over-optimistic macroeconomic forecast, with consequent effects on revenue. We continually raised this issue with the Commission, making the point that such a forecast might even be in conflict with its own forecasts for the Irish economy. It recognised that this might happen and suggested there would be a logical iterative process between bodies, so whether one took the independent body route or the endorsed route, the Department would be able to cope. The object is to take away what it sees as the danger that existed in the past whereby member states, for whatever reason, adopted what it viewed as unrealistic forecasts. In response to the question of how to solve that problem, this is the formulation they came up with.