Mr. John McCarthy:

First, I do not agree with the view that the fiscal rules constrain any form of expenditure. They are designed to ensure fiscal sustainability but it is left at the discretion of individual member states to make the choice as to whether they want to spend more or less. All the rules do is say that if the state wants to spend more - surprise, surprise - it must be able to finance it. I do not think there is any issue with that.

We engage with the Commission on an ongoing basis on various issues such as how the rules are interpreted and applied. Ireland is the exact same as every other member state. My colleagues from the CSO talk about their discussions with EUROSTAT. We engage with the Commission on pretty much a weekly or monthly basis.

There is potentially a role for some flexibility in the rules. We have a so-called investment clause. We cannot use it at the moment given where we are in the economic cycle but there is a structural reform clause which could be applied for potentially . Ultimately, the rules are about ensuring fiscal sustainability-----