Mr. Sebastian Barnes:

I think it does make a significant difference. It is a very good question. The answer to the narrow question is that, as many people have stated in terms of public debt, it is very helpful for a country not to be perceived as being worse than other countries. That is what happened from 2008 to 2010 and it was very costly. This time, there is stronger European support and Ireland's experience is similar to that of many other countries. That reduces our short-term concerns around the level of debt. In some ways, if Covid had not come along and we just had to deal with Brexit which, obviously, affects Ireland more than it does other countries, we might have been more concerned about the financing than we are. The fact that all countries are essentially in a similar boat in terms of debt provides some short-term reassurance.

The Deputy raised a key question with regard to the long term. These levels of debt are extremely high by post-Second World War standards, much higher than we have seen previously. On the other side, interest rates are probably at their lowest level in recorded history. That is a very interesting combination. Some of the best minds in economics are thinking about that question but have not really reached a firm conclusion. In terms of the public finances, what we do know is that even if interest rates were to rise quite quickly, it would take time for that to feed into the public finances because of the long maturity of the debt. Obviously, it would not help, but we would have a little time. In terms of long-term sustainability, if interest rates did go back to a much higher level, that would change the medium-term and long-term outlooks and, of course, would also affect how we think about the short term. The truth is that we do not really know how all of this will play out. It does raise very big questions.

As the Deputy stated, it raises intergenerational questions. We give a significant amount of consideration to public debt, but we should not forget that the State pension is not funded; it is a pay-as-you-go system. There are significant commitments that have been made for future generations as well. The sustainability of the pension system is also a big question and may partly be related to the low interest rate environment.

I do not know whether my colleagues, who are probably among the best minds in economics, have more insights on the issue. If they do not, I will leave it there.