Professor John McHale:

I will respond to Deputy Humphreys's first question. This goes to the essence of the trade-off we examined when we assessed the fiscal statistics. If one was to reduce the adjustments by €1.6 billion, that would probably improve nominal GDP in the case of our model by €800 million. That certainly would be a significant benefit. Currently we estimate that there is approximately a one in three chance, as I mentioned earlier, that the 3% target will not be hit, even if one makes the adjustments of €5.1 billion. That would probably rise - my colleague Mr. Diarmaid Smyth might remember the exact number - by approximately ten percentage points, which gives close to a 50% chance of not meeting that target. That is the trade-off one is looking at. The costs associated with not meeting the target would be greater if it were the result of our not implementing the plan to which we initially agreed. It would compound the fact that we had missed the targets if the reason was not just adverse growth but non-implementation of the plan that had been set out and agreed.

These are judgment calls, and there are trade-offs to be made. We absolutely understand that people may weigh these things differently, but given what we have achieved so far in the programme in terms of regaining the creditworthiness of the State and ensuring the State has the borrowing capacity that it needs, it would be a pity to risk those gains more than we need to. There is risk because of the uncertainly around the growth picture; however, the risk of not following through on the planned adjustment in our judgment is a risk that at this point is not worth taking. If the growth picture were to turn out better and it looked as though we would meet the target with fewer adjustments, that is something that could be considered as we got closer to the end of 2015.