Alice-Mary Higgins (Independent)
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One of the reasons the general escape clause had to be activated was the acknowledgement of the damage done by austerity measures and moving towards a short timeframe. It seems by adding these harder measures we are looking at a return to that short timeframe. The Parliamentary Budget Office gave a clear example that is relevant for everybody: the fiscal rules were one of the main reasons used to justify leasing of houses rather than building of public or social housing. It was because the capital expenditure would have a longer term return. Capital expenditure and long-term investment were constrained to the detriment of the social fabric, as opposed to short-term and more expensive approaches, such as leasing, which may have allowed countries to stay within fiscal constraints for that particular year. It seems to be still open. There is a question around what parts can be pushed. There is a danger of the same mistakes being made.

We look to Europe 2020: "smart, sustainable and inclusive growth". That was the map of what Europe’s policies were meant to be between 2010 and 2020. We effectively lost a decade of environmental investment because of that short-term piece, as well as social investment. I guess that is why the general escape clause became necessary, so that countries could deal with the health crisis in diminished public systems.

Does Dr. Sweeney feel this approach means there is a danger of us losing out again on capital expenditure and public investment? He mentioned the question of what gets included in climate expenditure. There are things that can be invested in in terms of climate - "green investment", as it is termed - whereby a profit may be returned within four or seven years. However, there are other areas which may deliver higher emissions reductions, may not deliver profit or fiscal growth but may be more effective in meeting our carbon targets. If we strengthen that, we are not looking at the kinds of climate investments that are profitable in seven years but at preventative spending, which is spending we make now to ensure we do not have negative consequences, including fiscally, down the line. Avoiding flooding, for example, may not be profitable but it certainly diminishes such consequences. That could be looked at in terms of what gets included and excluded in net primary expenditure. Will Dr. Sweeney comment on the debt sustainability analysis methodologies?

What is the scope for having factors in the debt sustainability analysis that are not solely fiscal factors regarding interest rates and so forth, but are factors around genuine and significant risk? These involve areas where, if we do not invest or expend, we create a significant risk, which will then come with a huge financial consequence, such as, for example, flooding.