Dáil Éireann Debate, Tuesday - 1 May 2012
171 Deputy Pearse Doherty asked the Minister for Finance if he will respond to the reservations on reported data (details supplied) contained in EUROSTAT press release 62/2012 issued on the 23 April 2012. [21201/12]
Amharc ar fhreagraThe Excessive Deficit Procedure Notification Tables (Maastricht Returns) were published by the Department of Finance and Eurostat on 23rd April 2012. Eurostat has attached two reservations to Ireland's return. The first reservation refers to the statistical treatment of the July 2011 banking recapitalisation when a net amount of €16.5 billion was injected into Irish financial institutions. At the time of the end-September Maastricht return, it was indicated publicly that a full examination of the deficit-impacting amount of this transfer would be made before the next notification. The outcome of this exercise is that of the €16.5 billion injected in June 2011, €5.8 billion is classified as a deficit-increasing capital transfer.
This adds 3.7 per cent of GDP to the deficit for 2011 only. 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. The reason Eurostat expressed this reservation on the capital transfer amount is due to the fact that restructuring plans of AIB and IL&P, which were used in the analysis, are not yet finalised. This is a prudent approach by Eurostat. When these plans are finalised and if the final versions do not differ significantly from the ones used here, this reservation will be lifted.
The second reservation concerns the statistical treatment of the NAMA Special Purpose Vehicle (SPV). A Eurostat 2009 special note on the financial crisis allows for the exclusion from general government debt and deficit statistics of a short-term new special purpose vehicle that is privately owned, is not expected to make losses and whose purpose is to deal with the financial crisis. The NAMA SPV was established with Eurostat's approval in this way with Irish Life as one of the private owners. However, as Irish Life is now in public ownership, Eurostat has attached a reservation to our Maastricht Returns.
However, this is not a concern as my Department has been notified that the sale of the Irish Life shareholding in the NAMA SPV to private investors has been agreed and it is anticipated that the transaction will be completed in the coming weeks. As a consequence, the statistical treatment of the NAMA SPV will be unchanged and it will continue to have no General Government impact.
