Most importantly, the Stability and Growth Pact should not be softened by introducing further exceptions and a longer list of “relevant factors” (including cyclical developments to some public investments or state aid measures for the financial sector), that can be invoked in the assessment of compliance with the deficit and debt criteria.
We still have favourable demographic trends, there is the capacity for a rebound in productivity growth, the Irish labour market continues to be more flexible than most and at the start of the crisis public debt as a percentage of GDP was low. However, the achievement of this potential is not inevitable and is contingent on sound economic management.