Dáil Éireann Debate, Wednesday - 20 June 2012
46 Deputy Michael McGrath asked the Minister for Finance when he expects a final adjudication in respect of the impact on the 2011 general Government deficit arising from the recapitalisation of the banks; and if he will make a statement on the matter. [30036/12]
View answerIn July 2011, a net amount of €16.5 billion was injected into Irish financial institutions. Following an examination of the nature of the transactions by the Central Statistics Office and Eurostat, €5.8 billion of the €16.5 billion injected was classified as a deficit-increasing capital transfer in the Maastricht Returns in March 2012. However, the recapitalisation of July 2011 was fully reflected in Ireland's general government debt reported to Eurostat in September 2011, so Ireland is no worse off. This is simply a statistical reclassification from financial transaction to capital transfer for deficit purposes. There is no impact on our debt position.
Eurostat reserved final adjudication in their April General Government Debt and Deficit release on the capital transfer amount because restructuring plans of Allied Irish Banks and Irish Life and Permanent, which were used in the analysis, were not approved at that time. I believe that the Irish Life and Permanent plan is being finalised and will be completed shortly. It is expected that the Allied Irish Banks plan will also be completed in the coming months, ahead of the end Q3 2012 deadline as per the most recent Memorandum of Economic and Fiscal Policies. When finalised, these restructuring plans must be submitted to the European Competition authorities. Once DG Comp has approved the plans Eurostat will be in a position to definitively classify the injections and we can confirm the impact on the General Government Deficit for 2011.
