Mr. Sebastian Barnes:

Deputy Doherty is correct that originally it was somewhat arbitrary. It was somewhat above the debt ratio that most countries had. The idea was to provide a bit of space. There is a mathematical formula, based on growth and interest rates at the time, that gave 60% as a debt ratio. One of the big constraints in the design of the revised rules is that the figures of 3% and 60% are written in the treaties. This means that if we want to change them we would have to change the treaties, which is a very complex process.

In terms of the substance of it, to my knowledge there is no specific number for debt which is a magical number and has deep properties. However, the broader point with debt is that the higher the debt ratio, the higher the risk. I can show committee members a slide which was taken from a paper. The higher the debt, the higher the risk and it increases in a linear way.