Mr. John McCarthy:

At the beginning of last year, the Commission introduced the investment clause in the Stability and Growth Pact, which was designed to promote investment. The problem is that the eligibility criteria for member states to qualify for the clause were set at very strict levels. It was done unilaterally by the Commission without any input from member states. The criteria are quite technical but two of them are worth mentioning. A member state needs to have a negative output gap - a very poor performing economy - but we have a positive gap and that restricts our ability to apply for the clause. The other is that all member states are supposed to be close to a balanced budget in structural terms but we are too far away from that position at the moment to be able to apply. However, as the Minister said, the so-called expenditure benchmark smooths investment over four years so for each X one puts in, one gets four times X in year one and that gives some flexibility on that front.