Mr. Rob Wright:

I will. I thank the Chairman. It is a pleasure to be here. I do not have a formal opening comment, but I would like to refer to page 4 and the executive summary. I will walk through a little bit to give members a brief overview of the report. It has been four years.

As the Chairman reported, we were appointed as a panel. The other panel members included Mr. John Malone, a very experienced Secretary General from the Irish public service, and Dr. Hans Borstlap, a senior official from the Dutch civil service and very experienced in the EU bureaucracy. Not a panel member, but Mr. Pat McArdle served as a senior economic adviser to the panel and was very active as well.

I was approached for this job by the Secretary General of the day. The guidelines for the panel were approved by a parliamentary committee and really heartily embraced by the Minister of the day, Brian Lenihan, who was very impressive and made the point it was time to take an honest look - a serious look - at, given the circumstance, what would we do looking forward to improve the Department of Finance. That is something I was interested in and I was certainly willing to devote the three-month timeline that we had to complete this report.

When we started the process, we had enormous support for the review. There was a great public interest in what we were doing. We asked for submissions. We offered to meet with a large number of participants. We did that over a period of months. It included stakeholders from the private sector, partners in the social partnership process and Members of this Parliament from all parties. I met a great number of people from within the Department. Again, the Secretary General of the day heartily embraced what we were doing and devoted a great deal of his resources to make sure it happened. We met people from the ground floor of the Department and then prepared our report.

I presume a number of members have read the report. We start with an overview of the Irish economy. It was a fascinating history of Irish economic history in which I took a particular interest and was eager to play a part, but members know that history.

The economy was transformed in the early 1990s by some real structural changes that dramatically improved Ireland's international competitiveness. That spurred a period of real growth, a very important growth, in the 1990s, further activated by Ireland's entry into the EU. Whereas people outside of Ireland, and probably in Ireland, anticipated that the pace of growth would cool somewhat at the turn of the century, it did not.

The second phase of growth in the first decade of the 2000s was very different from the 1990s growth. Ireland saw a deterioration of its international competitiveness but, buoyed by increased infrastructure investments, in part funded by the EU, and by joining a monetary union that clearly had at that time and throughout the early first decade of this century interest rates that were far too low for the circumstances of the Irish economy, growth was spurred, particularly in building. So, there was a deterioration of international competitiveness, yet there was still a very active economy.

Mr. Peter Nyberg's advice and recommendations yesterday were noted in this report. Interest rates were far too low for the macroeconomic environment in Ireland. There was a pressure, an economic case, for spending restraint. That did not happen. The construction boom further overheated the economy. It was aggravated by the financial sector which expanded, funded largely by short-term borrowings in Europe. At the same time, there was a very large increase in Government spending here. It averaged almost 12% per year for a decade between 1998 and 2008. That was an extraordinary expansionary process. All of that led to the crash in 2006-2007 particularly, which was severely aggravated by the failure of the Irish banking system when there was a very serious international climate, including in Canada. It caused a serious challenge here of which members are well aware.

Since then, Ireland has been working hard to re-establish the credentials and strength of the economy. I must say, there is a very different environment walking around the city now than there was four years, so I think there has been progress.

The Government acted with two scoping reviews on what to do. There was the first Honohan report and Regling and Watson did a report on various issues. Of course, there was a banking inquiry established with Mr. Nyberg and the review of the Department of Finance. We were quite deliberate in not wanting to overlap with the work on the banking sector, but we did draw from some observations in the Watson-Regling report that focused our review. There was one part of the mandate that we got from Parliament that was a little troubling, namely, to look at the policy processes of the Department of Finance for the last ten years. Having been a Deputy Minister of Finance, that is a massive amount of information, so we used the core observations from the Regling report to help focus our work.

We looked at three questions - how appropriate was the Department's advice on the risk of pro-cyclical fiscal policy, which was the No. 1 issue of our focus; secondly-----