Dr. Seán Healy:

The issue of the fiscal rules was raised. We published a briefing at the time of the proposed reform and the referendum for an Oireachtas committee that was examining the matter. This was before the referendum on the fiscal rules. We pointed out that the measures were quite dangerous. We set out what would happen, which is exactly what has happened. What has happened is that we now have the capacity within the country to build the infrastructure and develop services up to European average levels but are hindered in doing so because we cannot access the money due to the fiscal rules. We pointed out at the time - I believe this even more so now, and we are joined in our concerns by many serious people, big names - that the fiscal rules are not really solutions to the economic issues with which they were meant to deal. Quite recently, we met with the IMF evaluation unit that is examining the IMF's evaluation of its proposals for Ireland at the start of the bailout. It is quite clear that it now recognises that it could have got the same results for far less austerity and job losses, which were the two critical issues over which we argued with the IMF every three months during its visits here over all those years.

How can the fiscal rules be dealt with? There are a number of proposals. We are not alone in this: the French, the Italians and others have suggestions as to how to deal with them. One very good one, from my perspective, and which I would recommend, is that money going towards investment should not be counted in the calculation at all. If one builds a house, as Ms Murphy has said, it is built. It does not have to be built again next year. Therefore, it is a kind of one-off investment. This kind of investment in infrastructure should not be included in the calculation. This is quite different from wage increases or new employees that will recur in the following years. However, if this suggestion were acted on, Ireland would have more than sufficient space, and the money is there to be borrowed. Our problem will be that the time would have passed and the interest rates would have risen before Europe gets around to doing it. In a decade or two or three, people will look back on this generation of politicians and Governments and ask what possessed them, when money was available at a rate of 1% to Government, not to access it to provide the infrastructure that they will have spent decades having to put in place.