Professor John McHale:

I will take Deputy Doherty's points in order. First, I agree with him about the excessive focus on the sum of €2 billion. It is something that we struggle with because there is quite a lot in the report. It is what the media wants to focus on and it is an easy message to get across. One of the benefits of our interaction with this committee is that we can talk more broadly about the report.

Deputy Doherty noted that we are focused on following the rules. It is true that part of our mandate is to assess compliance with the national budgetary rules under the Fiscal Responsibility Act, but we also assess the overall fiscal stance separately from the rules. While sometimes it may not come across this way, we share the committee's concerns. Ultimately, it is what all of this means for households in the economy. The challenge is to have as little austerity as possible.

When the Fiscal Advisory Council first came into being in 2011, the markets were pricing in close to a 90% probability of an Irish default. That loss of capacity would likely have led to much greater austerity.