Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I thank the members of the Irish Fiscal Advisory Council. I do not always agree with their recommendations but I appreciate the work they do in these engagements. The witnesses identify two key vulnerabilities for us, one external and one domestic. My question is about the external one first. This is the one that is often mentioned but is not thought about much beyond that, namely, the possibility of a significant global downturn or external shock because of what is happening in the global economy. Is it fair to say that the Government is not factoring this into its projections for steady growth over the next period and its generally upbeat story about what is happening in the Irish economy and that it is extreme folly for the Government not to factor in what I consider to be the growing likelihood - the witnesses can say if they agree on this - of a significant external shock?

I wish to hear what the witnesses have to say on that but I will outline why I view it as a growing likelihood. First, mainstream people are saying it. My young nephew who is in my Dáil office did some research for me today and he picked out some examples of this. Willem Buiter of Citigroup, a New York based bank, is warning that it is very likely that China is facing a hard cyclical downturn and that this will have a very significant impact on the rest of the global economy due to falling demand and so forth. Similarly, the IMF has warned of a strong likelihood of a new global recession. Its head has said that the scenario the IMF is depicting does not rely on extreme assumptions at all. In other words, it is saying it is very likely. Frankly, when one looks at what is happening in China, it appears to be almost inevitable that this will happen. All of the money that exited from the banks in Europe and the western economies after 2008, which we bailed out, ran to China. It over-heated the Chinese economy and now China will face a downturn.

Is this not almost a racing certainty? In addition, there is a simple historical fact. The recession happened in 2007 and it is now 2015. Can we think of a period in recent history when there has not been a recession at least every eight to ten years? Is it not almost a racing certainty that there will be a shock of some type? We do not know the exact depth of it but it is not factored into the Government's projections.