Dr. Tom Healy:

The key point about public capital investment is that there are areas that require a co-ordinated State intervention, in some cases in co-operation with private enterprise. We are vulnerable in renewable energy, given that EU climate change regulations will probably no longer apply in the UK in the long run, and this may affect our trade in renewables. We need to invest more in renewables and this will require a State-led investment initiative. The overall level of public capital investment probably needs to be doubled, as a percentage of GDP. We need to invest more than 4% of GDP instead of just under 2%. The EU fiscal rules in this regard are not helpful, given that they treat investment in exactly the same way as Government consumption. The inflexibility of the rules on the composition of investment needs to shift. For example, much construction activity in the health and education sectors must take account of new EU regulations on energy consumption. For example, the regulations on school construction are much more rigorous, and this is probably adding up to 20% on costs in addition to recent estimates. This is an example of where fiscal rules need to allow member states to operate on a much longer timeframe and take a view that this upfront expenditure will have an economic return in the long run.

Although my comments are very much focused on the economic and employment implications of our response to Brexit, I underline the importance of the challenge for all of Irish society and the need for a whole of Government approach. It crosses all Ministries and requires careful consideration from an economic, social, legal and constitutional point of view. It is probably the most significant challenge we have faced in many decades and, I am afraid, it will be with us for many more years. The upside is that we have an opportunity to question the existing economic and social model we have and this may be a very good opportunity - the best of times and the worst of times - to make a new departure and a real difference in the way we do business.