Brendan Howlin (Wexford, Labour) | Oireachtas source

This will increasingly become a point of discussion because it really is one on which we need to come to a conclusion. However, we will not be able to come to a conclusion on it domestically. I refer to the question of what is now being called the fiscal space, namely, the space within the fiscal rules in which we can either increase expenditure or reduce taxation. The first point I should make is that the rules are very complicated. In a way, they have to be teased out. I discussed this matter bilaterally with the German finance Minister, Mr. Wolfgang Schäuble, when I met him in Dublin. I discussed it in the past ten days with the Slovenian Minister, who has similar issues. I discussed it also with the new EU Vice President and economics Commissioner. A number of countries are already alerting the Commission to concerns over the availability of sufficient fiscal space for countries whose economic circumstances allow increased expenditure to engage in such expenditure. They are coming at it from different angles. Some countries in the east, for example, are concerned about the perceived growing threat from Russia and what is happening in Ukraine. They want to increase military expenditure. Other countries, such as Ireland and Italy, are very anxious to increase expenditure on necessary infrastructure. Whether that should be captured in any calculation of allowable expenditure for fiscal ceiling purposes is open to debate. There are technical issues on which we are engaging. These concern the profiling of Ireland in terms of population trends, for example. In reality, these might not be what were perceived to be the reality when people were leaving the country at the height of the depression. We need to work out a technical agreement with the Commission that will give us sufficient capacity to allow our economy to continue to grow, meet critical infrastructural deficiencies, which the Deputies could name, and continue to ensure that social expenditure meets the social needs of our people.

All these matters will be subject to an increasing amount of debate in the future. Deputy McDonald has put her finger on an important issue.