Dr. Tom McDonnell:

Questions were raised on capital spend and how to address the issue. Essentially, there are five ways to do it. We can simply allocate a larger amount within the fiscal space on the basis of faster expenditure growth. That can only be done through discretionary revenue measures, as we know. The Irish Fiscal Advisory Council has indicated the position on current spending. The estimated additional expenditure in a standstill scenario, i.e. taking into account demographic and price changes, is already at the point of the allocation for current spending. The only way we can dig into current spending is through potential efficiency savings. Without changing the composition there would have to be cuts. There is an investment clause. However, it does not apply to Ireland because it is only relevant when the output gap is at a certain level, in other words, when the economy is close to recession. There is a structural reform clause. This is very difficult to invoke and it has never been shown in practice. We would need to show that the reform undertaken would generate a faster rate of growth and would definitely lead to a more productive economy in future. It could be imagined in a post-conflict situation or after a severe recession where there is a clear infrastructural deficit. For example, five or ten years ago it might have been relevant for rural broadband. It might be tougher now. It is something where we would have to see a productivity increase.