Mr. John McCarthy:

Specifically, the Deputy asked what has been done to increase the fiscal headroom. The Minister raised this matter at ECOFIN. The fiscal space is calculated on the basis of ten-year averages of growth rates and its potential. Let us talk about growth rates. Some growth rates are backward-looking and some are forward-looking. The fiscal space is supposed to be revised every three years. On foot of the Minister's intervention, we argued that it was unfair to Ireland because the backward-looking application was taking into account the very bad years, when growth was minus 5% or minus 6%. That was feeding into the average. The intervention was at a technical level. We provided a technical argument that one should forget about those years and that it should be updated more frequently. That was agreed at a technical level and then Ministers agreed it at a political level. That in itself opened up additional fiscal space and it was about two years ago. We just made our argument strongly and it was agreed upon at the Commission and at political level. There were some positives on that front.