A radical multi-billion euro stimulus package to rescue the economy and a much greater State role in health and housing are at the centre of the deal largely agreed between Fine Gael and Fianna Fáil, said Micheál Martin.

In an interview with the Irish Examiner, Mr Martin said the “principles-based” document agreed by the parties can lead towards single-tier health system and to the State acquiring properties for social housing and affordable housing.

He said the recession will lead to a “toleration of larger deficits” to fund this stimulus package.

“Economists globally are of view that austerity isn’t the way to deal with this crisis, the opposite actually,” he said.

“Keynesian economics are back in fashion. This is the time that you use your welfare system and that you use your public services to drive on the economy.

“Underpinning the document is this idea of how do we restart our economy to try and mitigate the worst of the recession. It means targeted and comprehensive planning sector by sector utilising freer and more flexible than state aid rules, fiscal rules, and also a toleration of higher deficits.”

He highlighted supports for the travel, tourism, and hospitality sectors.

“I think there’s opportunity sector by sector to reconfigure how you do things and there will be a stronger focus on society and on quality of life,” said Mr Martin.

“And I think that’s where housing and climate change and childcare come into focus because they speak to quality of life issues.”