Ciarán Lynch (Cork South Central, Labour) | Oireachtas source

Thank you very much. Okay, I'll just deal with one question myself, Mr. McNally, and then we'll move towards the wrap-up and I'll invite both Senator Barrett and Senator D'Arcy back in again. If I could just relate to, and I think Senator MacSharry touched upon this with you just a moment ago, on 24 January 2001, the European Commission concluded that Irish fiscal policy was inconsistent with the broad European policy guidelines. They further asked Ireland to avoid further overheating of its economy, and there's a document, I think, coming up on the screen there now, but you make reference to this, I think, actually in your own opening address today, where you mention, I think, it's on page 4 of your opening statement:

The only notable exception to this is the recommendation issued to the State in 2001 by the Economic and Finance Council under Article 99(4) of the Treaty to take countervailing budgetary measures during 2001 to avoid overheating. This recommendation was not felt warranted and was not accepted by the Irish authorities.

And if I just, the document is there, if I just move one or two pages into it, it's page 13 of the document itself, on the bottom, it's ... next one ... next one again ... just page 13 of it. And if you look at the last paragraph of it there, Mr. McNally, just come in there about three lines down, it says:

Against this background, the Council finds that the planned contribution of fiscal policy to the macroeconomic policy mix in Ireland is inappropriate. The Council recalls that it has repeatedly urged the Irish authorities, most recently in its 2000 broad guidelines of the economic policies, to ensure economic stability by means of fiscal policy. The Council regrets that this advice was not reflected in the budget [of] 2001, despite developments in the course of 2000 indicating an increasing extent of overheating. The Council considers that Irish fiscal policy [of]2001 is not consistent with ... broad guidelines of the economic policies as regards budgetary policy.

And it goes on and on.

Now, we've had reports from some institutions like the IMF and others that said in around 2005, 2006, they were getting things wrong. But this one would seem to be very, very strident in its language and in its indication of action required and so forth. So could you, as I say, I think the document is of 12 February 2001, this, so ... and the European Council recommend that countervailing measures be taken, as I just cited. Could you tell us what action was taken by the Department of Finance on receipt of this very, very strong advice as outlined from the European Council?