The budget takes place in very strange circumstances. The Irish Government is, for now, able to borrow at remarkably low interest rates, lower than was possible before crisis struck in 2008. That is to say, a Government struggling with massive debts which forced it into a bailout by official lenders in 2010 is now borrowing at historically low rates, even though its outstanding debt is much higher than when rescue was needed.

The debt will continue to rise unless the deficit is eliminated. The Government claims that the reduced borrowing cost reflects market recognition of better financial management, which cannot be correct.

Other distressed eurozone governments which have failed to meet fiscal targets can also borrow at bargain rates. It is true that the Government has cut the deficit over the last few years, but it is not true that today’s low borrowing costs are a reward for Irish fiscal prudence.

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The Government and the media can assert and repeat this mantra as often and as long as they wish, but it gains no credence through repetition.

The main reason for low Irish borrowing costs is the ‘‘Draghi Put’’. Since the September 2012 announcement of European Central Bank (ECB) willingness to backstop eurozone bond markets, investors believe that the next sell-off will be mopped up by the central bank.

ECB president Mario Draghi is expected to buy any eurozone bonds the markets wish to sell, and this provides a ceiling for government borrowing costs.

The markets assume they have a free put option, implicitly at today’s price, in unlimited amounts, so it is safe to hold the bonds of otherwise uninvestable sovereign states. This, rather than deficit reduction by the distressed eurozone countries, is the explanation for the reduction in sovereign bond yields.

There has, as yet, been no test of the ECB’s resolve in the markets. Should a sell-off start at some stage, as it surely must, nobody knows at what interest rate the ECB would intervene. They could decide to let rates rise substantially before taking action, drowning the Government’s budget sums in red ink. The ECB is believed to have placed a ceiling on government borrowing costs but nobody knows what this ceiling is. Moreover, the ECB could be blocked from taking action at all. The German constitutional court has already queried the legality of the untested ECB policy and referred the matter to the European Court in Luxembourg, which will pronounce in due course.

Budget projections, which assume that low borrowing costs will continue indefinitely, are accordingly coasting along on a wing and a prayer. This is not to say that the ECB is wrong to backstop the bond market; the survival of the common currency required it. However, there is simply no guarantee that the ECB will be either willing or able to deliver. Borrowing costs for the Irish Government a few years from now will almost certainly be higher than today and there is a risk that they could be substantially higher.

Once a country has amassed heavy government debt, there is a continuing risk of falling off the tightrope. Ireland’s official debt now exceeds 140% of national income, historically a level which leaves countries vulnerable to any adverse movement in world financial markets. Running deficits which expand the debt even further increases the risk of losing market access, another lurch into emergency borrowing and the return of the troika. The independent Irish Fiscal Advisory Council has advised that there be no giveaway budget.

The outstanding debt on the State balance sheet is now so large that it will take at least a decade to make the Irish Exchequer solvent again. That means at least a decade of zero or surplus budgets.

The debt continues to rise until there is a zero deficit. The Government has decided to distribute the unexpected revenue flowing from economic recovery, rather than permitting the deficit to fall more quickly. It has chosen, it would appear, to recoil from the scary prospect that the deficit gap might close too quickly.

The explicit reason given for the abandonment of the planned adjustment (tax rises and expenditure cuts totalling €2bn for 2015) is economic recovery. This is a brazen acknowledgement that policy is once again pro-cyclical – things are going well, so budgetary policy is to be relaxed. No lessons are to be learned from the days of ‘‘If I have it, I spend it.’’