Professor John McHale:

I disagree quite strongly that the budgetary framework put in place and the rules that are part of that are not quite advantageous and positive for the Irish economy. The rules will bring us close to a balanced budget position and will allow our debt to come down to safer levels over time to minimise the risks the Deputy refers to. When there are surges in tax revenues, particularly with the expenditure benchmark, it is harder to make the kind of mistakes we made before when we ramped up expenditures to match those revenues. The key reason for pursuing these rules is not that the European Commission tells us to do it but because it is good for the Irish economy and will keep it safe. It was always likely that as time passed after the crisis what the Deputy described was going to happen.

People were going to begin to forget and say, "We do not need this framework; we can move back in the direction of the policies we had previously". Making it part of the national framework and putting in place a committee like this and an institution like ours helps to institutionalise that memory in order that we do not easily forget. It is easy to think that we do not face these risks. If we are hit by adverse shocks, having a strong budgetary framework at any debt level will become a huge asset because it will give credibility that the country will be able to get through them without defaulting, which will allow Ministers to do the borrowing that would be necessary to avoid austerity in the context of a deep crisis. That is one of the advantages to a strong framework but I ask the committee not to forget and to carry that memory of the pain we had to go through because of mistakes made in the past and to see that this framework that can, hopefully, help us avoid making them again.