Sovereign Debt

Dáil Éireann Debate, Thursday - 19 July 2012

Thursday, 19 July 2012

Questions (69, 70)

Kevin Humphreys

Question:

69 Deputy Kevin Humphreys asked the Minister for Finance if his attention has been drawn to the amount of Irish sovereign debt purchased in the secondary markets that is held by the European Central Bank; if Ireland has requested a write-down of these bonds to cost paid by the ECB; the estimated savings to Ireland if this was to occur; his views on whether any profits the ECB makes from holding Irish sovereign bonds should be redirected to the central banks of other euro countries; and if he will make a statement on the matter. [36082/12]

Kevin Humphreys

Question:

70 Deputy Kevin Humphreys asked the Minister for Finance the analysis within his Department, the National Treasury Management Agency or Central Bank that has been carried out on European Central Bank holdings of Irish sovereign bonds purchased under the securities markets programme; the savings that would accrue to our national debt, if any, if Ireland was to receive the same deal on these holdings as Greece received; the analysis that has been carried by the NTMA, him or the Central Bank on the agreement between Greece and the ECB when Greece's debt was restructured; the way it might apply to Ireland; and if he will make a statement on the matter. [36083/12]

Written answers

Minister for Finance (Deputy Michael Noonan)

I propose to take Questions Nos. 69 and 70 together.

There has been speculation for some time now about the extent of the European Central Bank's (ECB) purchases of sovereign debt on the secondary markets. The Central Bank of Ireland maintains the register of holders of Irish Government bonds. As I outlined to the Deputy in response to a similar question back in February, I am informed by the Central Bank that the ECB does not disclose its holdings of sovereign debt and therefore it is not possible to supply the information requested by the Deputy. As regards the income the ECB earns from securities purchased under the Securities Market Programme (SMP) the ECB distributes profits from securities purchased under the SMP to National Central Banks in the form of an interim distribution of profit. The Governing Council of the ECB may decide to retain all or part of that income, in certain circumstances.

Of course, and as the Deputy will be aware, preliminary discussions which could have a positive effect on the Irish debt situation are underway. This follows on from the end-June euro area summit where it was agreed that the situation of the Irish financial sector would be examined with the view of further improving the sustainability of the well-performing adjustment Programme. This is a positive development for Ireland. However, it is important not to prejudice the outcome of these negotiations by commenting on the likely contents of any agreement at this time. I can assure the Deputy that we will seek to be ambitious in the negotiations and will seek to agree the best deal possible for the Irish taxpayer.