Dr. Kieran McQuinn:

This is a very interesting development that we have seen being discussed over the past number of months as part of a general discussion around a revisiting of the fiscal rules. Potentially, excluding climate change expenditure is a good idea and there are a number of reasons to argue for it. Obviously, this is an issue that is confronting nearly all countries in the European Union and there is a possibility to get agreement across many of them. Investment is required. One advantage of having climate measures excluded from the rules is that, arguably, it will enable the Government to commit to them on a multi-annual basis. With the crisis emerging in Ukraine, we have seen domestically that there is always a danger that the climate change agenda could be derailed by the issues that are pressing today. However, we all agree that, in the longer term or even the medium term, climate change is the hugely important issue. Having measures in that area excluded from the fiscal rules would give them a certain degree of security of funding by domestic governments and ensure this funding is not thrown off course by urgent issues that might arise on a day-to-day basis.

There also is the possibility for other areas of expenditure to be excluded from the fiscal rules. Housing is an area that could be considered. The housing issues and difficulties we have in Ireland are not specific to the Irish market. We see constant reference right across Europe to difficulties that are being experienced in this area in other jurisdictions. I would argue that we could even look to exclude expenditure on housing. We know there is an overlap between climate change and housing in terms of the retrofitting issue. There clearly are areas that could be developed in that regard.