Dr. Donal Donovan:

Senator Byrne made an important distinction between austerity in Ireland and the euro area. Sometimes that is not recognised when people talk about austerity in general. The report and the council's chairman comments cover austerity in Ireland and I do not have anything much to add.

Euro-wide austerity is not within the remit of the Irish Fiscal Council. I shall offer my personal view, one that my colleagues may not share. When one examines macroeconomics in Europe a case can be made to do more given that there is not much scope for further stimulus arising from monetary policies. I am not saying that an overwhelming case can be made, just a strong and respectable one. The northern countries who are not under the same debt constraints could do more by way of fiscal stimulus or they could do less by way of fiscal consolidation. Quite a number of economists, though not all, share my view, including many with a centrist position and not only the liberal position. It is not for Ireland to determine the matter, but the Germans. So far, and partly as a result of timing, the view that Germany and others should expand more has not found sufficient favour with a fairly significant majority of the German electorate, and not only the Chancellor. That is where we are.