Brian Cowen (Laois-Offaly, Fianna Fail)

As Deputy Kenny is aware, we are experiencing a sharp deterioration in the economic situation internationally and that obviously affects an open economy like Ireland's, as any other. The Government's approach has been to invest over €8.2 billion in direct Exchequer funding in a capital investment programme, together with the possibility of up to a further €800 million in public private partnership money for next year's capital programme. That represents about 5.2% or 5.3% of GNP, which is more than twice the average capital investment in other countries. The package being suggested relates to a stimulus of the order of 1% of GNP. There are various responses from various countries to be envisaged in that, in terms of the draft Commission proposal for consideration at the European Council meeting next week. We are already investing about 2.5% more as a percentage of GNP in capital infrastructure next year, based on existing plans, than the European Union average. We have kept up capital expenditure to the greatest extent possible because we believe that is an important part of providing for a more competitive economy when the upturn comes.

As regards the current budget deficit, an increasing amount of funding will have to be provided next year for a deficit on the current side. We need to address that issue over a period of years to ensure we bring current budget spending back into balance, which will require primarily continuing to look at expenditure programmes. That is the reason Mr. Colm McCarthy's group will come forward early next year with proposals for what other areas of expenditure we will have to examine in order to ensure that we provide some stabilisation in the public finances.

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