The Department of Finance, in publishing its draft Stability Pact Update (SPU) and its Minister, Michael Noonan, in commenting on the document, have sought to balance economic and political concerns. First, to reassure the European Commission that Ireland remains on target to leave the Excessive Deficit Procedure in 2015, with a General Government Balance – or deficit – then below 3 per cent of GDP. According to the SPU, that requires a further €2 billion in savings in next October's budget, via a blend of spending cuts and tax rises.

Mr Noonan, no doubt conscious that the Government parties face European and local elections next month and no doubt anxious to minimise the impact of further austerity on a weary electorate, has promised to ease the tax burden for middle-income earners. Both the required €2 billion adjustment and the financing tax cuts could be reconciled, he said. Tax cuts remain more a political aspiration than a binding economic commitment.

The performance of the Irish economy has in recent months been harder to interpret, and therefore more difficult to forecast with much accuracy. Last year economic activity, as measured by gross domestic product (GDP), contracted. This happened despite unemployment falling to under 12 per cent last month and employment rising by 2.4 per cent in 2013.

A variety of reasons have been offered to explain Ireland’s sluggish economic performance, and also to excuse the mainly over optimistic growth estimates of most economic forecasters. Undoubtedly, the “patent cliff” – where top-selling drugs that lose their patent protection that results in sharp falls in company profits – was a major factor. As pharmaceuticals account for almost half of all Irish goods exports, they helped to explain the unexpected contraction in the economy last year, which forecasters were slow to anticipate. The “patent cliff” effect, the Department of Finance assures us, will be less pronounced in 2014. Let us hope that forecast is right this time.