If the costs of importing and exporting go up (including extra transit time and additional administrative burdens), the range of imported goods available to Irish consumers and firms may shrink, while domestic firms will find it more difficult to access export markets. Counter-cyclical fiscal policy Let me now turn to the debate about the appropriate fiscal strategy for Ireland. A balancing act is required.
In one direction, the accumulation of good news about the trend path for the Irish economy calls for the political system to make proportionate decisions about the paths for public spending and taxation, given the extra fiscal capacity to meet social preferences for increased provision of public services, increased transfers, expanded public investment or an adjustment in the tax burden.