Mr. Valdis Dombrovskis:

First of all, of course we must see the final agreement of Brexit to assess potential economic consequences, including for Ireland. As I said, the member states are still preparing a mandate for the European Commission to negotiate its future relationship so at this stage we cannot really say what exact implications it will have and what response will be required.

In terms of flexibility within EU fiscal rules, as I mentioned in my introductory remarks, there is a certain flexibility and there is an investment clause allowing countries to temporarily deviate to facilitate EU co-financed investment. There is a structural reform clause to support structural reforms. There is an exceptional circumstances clause which has been used, for example, in the case of natural disasters and also in the context of the migration crisis in 2015. There are different possibilities which are available according to EU fiscal rules. When and which of those tools are used and when and which of those tools are requested is also the competence of the Irish authorities. I discussed that also yesterday with the Minister for Finance, Deputy Donohoe. It is also clear that it is important to find the appropriate timing. When an economy is growing like now by 4% to 5% a year, which is the Commission forecast, and if anything the outcome may be at least as good, if not better, as our autumn forecast then it may not, therefore, be the best moment to trigger all the flexibility clauses.

If there is a Brexit that triggers large negative economic consequences then those clauses are there and can be triggered. It provides a certain fiscal buffer in a more forward looking way. When I described our proposals on deepening the economic and monetary union, one of the proposals is a euro area fiscal stabilisation function to protect investment. While it is a new proposal and needs to be discussed by EU members states and by the European Parliament and eventually agreed, if it becomes part of the decisions that are taken in the context of deepening economic and monetary union then, once again, it is possible to use. This fiscal stabilisation function is exactly there to support countries in case of large asymmetric economic shocks.