Mr. John McCarthy:

The fiscal rules state nothing about what a country can do in terms of current or capital spending. They merely stipulate that whatever is spent needs to be financed. A country can choose a UK-type model, a relatively low size of government, or a Swedish-type model. The country just needs to finance the expenditure. In principle everybody agrees with this.

Some flexibility is included in the Stability and Growth Pact in that investment is smoothed over a four-year period. Therefore, spending can be ramped up in a particular year. In the summer economic statement we set out that by increasing the level of investment by €60 million, it could be leveraged upwards to something like €240 million or €250 million in 2017. This is certainly in the Government's plans and there is scope to do it. I stress it is above and beyond what is already identified in the public capital programme. As I mentioned, an additional €200 million was announced at mid-year that had not been provided for to be used, I believe, for school projects and flood relief measures.

There will be a fairly significant increase in investment over the medium term.