The secretary general of the Department of Finance has defended its forecasts relating the public finances during the economic crisis.
Fine Gael Deputy Kieran O'Donnell asked Kevin Cardiff at today's Public Accounts Committee how the department had got it so wrong in its estimates for 2009 when the department ended up taking €10 billion less than forecast.
Mr Cardiff said the economy had 'fallen off a cliff in an unexpected way' in 2009, but he defended the forecasting used as being 'in line with general forecasts'.
He acknowledged that the system ought to have been restructured so that there was not so much risk around a particular sector.
He rejected that the department had been too meek in its dealing with successive finance ministers, as had been suggested in the Wright Report.
On the EU-IMF bail-out, Mr Cardiff said a 2% rate cut on our interest rate would result in a saving to the Exchequer of up to €7 billion over a seven-year period.
Mr Cardiff would not be drawn on today's EU summit, saying he did not want to conduct parallel negotiations in public while his colleagues were engaged in talks.
Mr Cardiff rejected suggestions that a default on Ireland's debt was inevitable.
He said the department gave thought to a lot of scenarios but that it wasn't focusing on default as that was not a likely scenario.
Responding to questions from Independent Deputy Shane Ross, the Mr Cardiff said Ireland had a great advantage over Greece in that Ireland was a wealthier nation with stronger institutions.
Deputy Ross said it would be extraordinary if the Department was not making contingency plans for a default, whether forced or structured.
Representatives of the Department of Finance also told the Public Accounts Committee that they are in the process of moving the banks to a more simplified position on bonus payments so it can properly report bonuses to parliament.
John Moran said that bonuses were not permissible right now. But he defended the position where bonuses that were contractually due pre-dating the bonus ban were paid.
He said there was a dilemma as to whether they should be paid or whether the state should engage in litigation which it probably would lose.
PAC Chairman John McGuinness said that the banks had misled the department on a number of occasions in what he said was a demonstration of lack of respect for parliament.
He said there was a huge cultural change required in how the department does its business and he was not convinced that it had got it right yet.
