Dr. Kieran McQuinn:

It is clear that the role of the ECB is hugely influential in terms of its policies. Indeed, the Deputy referred to Mario Draghi. There is no doubt that his decision-making and policy initiatives have had a massive impact on Ireland's recovery. For example, it basically reduced substantially the interest payments that we were paying on the debt and made the debt, as a result, more affordable. It is interesting that the Deputy mentioned this because the whole concept of interest, the servicing of the debt and the interest repayments of the debt as a percentage of GDP, is one measure that has been advocated, particularly in the US literature by very notable economists such as Larry Summers and Jason Furman, who say that this should be a fiscal metric that is used more to determine sustainability rather than some of the metrics that are used, for example, in the fiscal framework that revolves around issues such as debt to GDP and coming along with a 3% deficit limit. There is no doubt that the ECB has a huge role to play. The ECB has kept interest rates very low on the market because of its policies over the recent period. That is very welcome and essential at the present time. Indeed, it is hoped that will continue over the foreseeable future.

Equally, there is no doubt that as a member state we cannot go on running sizeable deficits of between 5% and 7%. Over time that is not sustainable. Particularly for a small open economy like ourselves, it is prudent policy to try to accumulate some fiscal buffers for the rainy day. One could argue that our decision to run relatively prudent budgetary policy over the past five or six years - and we accumulated surpluses in 2018 and 2019 - led us to be in a position where we could cope with the fiscal challenges that we now cope with. It is a case of, on the one hand, ensuring that we return to a degree of fiscal normality and fiscal discipline after the crisis has passed. Equally, in terms of any debate on the fiscal framework, we would certainly call for it to be reformed to allow for greater investment in member state countries. This view goes back to the point that we made in our opening statement, which is recognised by policymakers across Europe, that it is not just about the policies of the ECB and keeping interest rates low, it is about unconventional, as they are called, fiscal policies as well being required to stimulate growth and economic activity right across the euro area.