Mr. John McCarthy:

If it is all right with the Senator, I will make one or two comments. I tend to agree with the first point he made about how it was necessary to cut capital. I agree because, in 2010, the OECD undertook a survey of the Irish economy, as it does every two years. It stated there were a number of projects in the pipeline that only just crossed the cost-benefit analysis line. However, that cost-benefit analysis had been done on the basis of growth rates of 4% or 4.5% coming down the line and once there was a reassessment of the position to the effect that the potential growth rate of the economy was lower than had been assumed, many of these projects were not viable. As the OECD recommended that some capital projects should be cut, there is research to support one argument the Senator is making. I should stress that what the growth survey does is very much European Union-wide and within that, when fiscal responsibility is being talked about, it is not simply aimed at consolidation. There are implicit recommendations to some countries that have fiscal space. I think the Senator knows which country I am talking about. It has large infrastructural needs and, as the Senator quite rightly noted, can pretty much borrow at record lows. As a result, the rate of return on the investment would be very high relative to its cost. That would stimulate its economy, would boost its potential growth rate and would have a spillover effect to the rest of the European Union by helping to reduce imbalances. It is not just about fiscal adjustment on the way down and so forth. These are a couple of preliminary comments in response to the Senator's observations.