Dr. Kieran McQuinn:

Deputy Broughan asked about households. I will refer back to some previous work done by my colleague, Dr. Martina Lawless. She looked at the impact on household expenditure and household budgets. She examined the likely increase in prices households would face. Again, quite detailed work was carried out to look at the impact. It is significant if we look at the overall impact. She referenced a range of potentially €900 to €1,400 being added to the typical budget because of higher import prices. She looked at the various sectors of the economy that were likely to have World Trade Organisation tariffs applied and then at the knock-on impacts on the average household spend domestically as a result. Those are substantial increases.

Many of those increases tend to hit families at the lower end of the distribution because of their disproportionate reliance on products that potentially will have tariffs applied to them. There is no doubt they can be quite significant at a micro level in terms of the household implications.

On the issue of obtaining additional transfers from Europe, the only point I would make is that we could be victims of our own success if the performance of the Irish economy over the past four to five years is looked at. The fact is we have had very substantial growth rates, albeit from a low base and after the financial crisis. From a negotiating point of view one could see a difficulty in convincing European partners that we need to get additional social transfers when our economy has been growing at between three and five times the rate of the average European economy over the period. That certainly could be an issue. Obviously, if we reach a situation where we have a very dramatic impact on households, maybe that could be looked at.

In terms of being sanguine about all of this, there is always a danger with models. There are limitations to them. In particular in the context of the present study, it is very difficult to get a handle on a country in a relatively unprecedented situation of removing itself from a trading union, as is the proposed case. Dr. Bergin can talk about this herself but she and her colleagues have done a lot of stress testing of the model to see, for instance, what kind of trade effect there would need to be to have an impact on headline GDP such as we saw after the financial crisis. There would need to be a massive trade impact for the economy to collapse pretty much in the way it did in the period of 2008 to 2009 when the credit bubble collapsed. I take the Deputy's point that there is always a danger we can be a bit sanguine about this, but there has been a fair amount of stress testing and analysis done to underpin the analysis.