Mr. John McCarthy:

Yes, this is our projection for next year. It is the headline figure. We will go through some of the details in the presentation. Once we update the forecasts we will publish the full details alongside the budgetary documentation.

We are here because economic governance reforms at euro area level have a major impact. These include the six-pack and the fiscal compact. In particular the two-pack, which has been on the Statute Book since the end of May, provides for forecasts to be outsourced from treasuries within the euro area or endorsed by an independent authority. To the best of my knowledge most, if not all, euro area countries are going down the same route as Ireland, namely, the endorsement route. The Irish Fiscal Advisory Council has been assigned the task of endorsement by way of an amendment to the Fiscal Responsibility Act passed by the Oireachtas over the summer. IFAC is a statutorily independent body with a role in assisting greater fiscal transparency and improved fiscal governance. However, decisions on budgetary policy obviously and clearly remain in the domain of the Oireachtas.

To operationalise the endorsement process we have drawn up a memorandum of understanding between the Department and the Irish Fiscal Advisory Council. It was drawn up over the summer and has been put on the websites of both organisations. I understand the process in many euro area countries is similar. The memorandum of understanding sets out that we provide the council and the secretariat with our provisional economic forecasts. We do not discuss budgetary projections or consolidation; nothing like this enters our discussions with IFAC. It is purely a macroeconomic discussion. Formal presentations were provided by the team to the secretariat of the council on 25 September and to the full council on 30 September as provided for in the memorandum of understanding. On foot of these interactions at a technical level, I can confirm a letter was issued by the chair of the Irish Fiscal Advisory Council last Friday to the Secretary General of the Department confirming the forecasts were in an endorsable range. This letter will be put on our website on the day of the budget.

My team and I will now go through the exact same presentation provided to the Irish Fiscal Advisory Council. Ms Dalton is the specialist on the international side, Mr. Enright works on domestic developments and Mr. Sweeney works on price developers. I will summarise what I see as the key points after every three or four slides. As I stated earlier, we are quite happy to take questions during the presentations given the fact that-----