Professor Philip Lane:

I welcome, first, that over the past five years there has been substantial progress. There has been a lot of discipline and pain taken in controlling public sector pay. It is important that there is an aspect of participation in the recovering economy with regard to the choices made by the Oireachtas. It is freer now than it was before. As the economy gets closer to full employment, and given that we have these significant tail risks, the level of our ambition should not be just to try to balance the budget, or to get close to it, but to move into significant surplus. I would not say that running a very big surplus is necessary for the next budget and for 2020 and 2021 if these current good conditions continue. If that is not the case then we should be levelling out at a zero budget balance or close to it but if these conditions continue the debate should be about reconciling all that the Oireachtas wants to do with running a significant surplus.