Dáil Éireann Debate, Tuesday - 12 April 2011
122 Deputy Catherine Murphy asked the Minister for Finance if a risk assessment has been carried out since September 2008 in relation to a sovereign default; if so, what are the contingency arrangements; and if he will make a statement on the matter. [7310/11]
Amharc ar fhreagraIn relation to the issue of sovereign default, let me be clear: Ireland has never contemplated the possibility of defaulting on its sovereign debt and this position has been restated on several occasions. The Government, without any question, will fully honour all its legal obligations to its creditors and has no intention whatsoever of allowing a default.
123 Deputy Catherine Murphy asked the Minister for Finance if a risk assessment has been carried out in relation to the collapse of the euro; if so, what are the contingency arrangements; and if he will make a statement on the matter. [7311/11]
Amharc ar fhreagraThe question of a collapse of the euro does not arise. A comprehensive package of measures has been developed and adopted at European level to safeguard the financial stability of the euro area.
The global economic and financial crisis that first emerged in 2008 has had wide ranging repercussions both internally and externally for Europe and the euro area. While the scale and scope of the euro area's challenges remain considerable it is important to note the actions already taken.
At a national level, Ireland's membership of the European Union and the Eurozone in particular has played a vital role in our response to the current crisis. The European Central Bank has provided considerable support to the Irish banks since the wholesale markets effectively closed to Irish banks. This support has been and remains crucial.
At a broader European level, the European Council of 24/25 March adopted a comprehensive package of measures to respond to the crisis, to preserve financial stability and to lay the ground for smart, sustainable, socially inclusive and job-creating growth. This package will strengthen the economic governance of the European Union and ensure the lasting stability of the euro area as a whole.
The adopted package includes a reform of the Stability and Growth Pact aimed at enhancing the surveillance of fiscal policies and applying enforcement measures more consistently and at an earlier stage, new provisions on national fiscal frameworks and a new surveillance of macroeconomic imbalances. The new Euro Plus Pact agreed by the Heads of State or Government of the euro area joined by Bulgaria, Denmark, Latvia, Lithuania, Poland and Romania will further strengthen the economic pillar of EMU and achieve a new quality of economic policy coordination. The Council also decided on the setting up of the European Stability Mechanism to further ensure the financial stability of the euro area.
Again, as part of our programme for Government, we will bring forward domestic rules to strengthen our Budgetary framework. This development will have the advantage of improving confidence in our framework while at the same time ensuring that Governments in future run more sustainable budgets.
