Dáil Éireann Debate, Wednesday - 23 May 2012
23 Deputy Jim Daly asked the Minister for Finance the amount that has been saved in the 2012 spending budget as a result of the non-payment of the Anglo promissory note; if this saving is available for spending in other areas; if he will consider injecting this revenue into a targeted investment in infrastructure such as broadband; and if he will make a statement on the matter. [25568/12]
Amharc ar fhreagraThe Deputy should be aware that the State met fully its obligations with regard to this year's promissory note payment to IBRC (formerly Anglo Irish Bank and Irish Nationwide Building Society). This year's payment was settled through a different mechanism than in 2011 — with a Government bond rather than a direct cash payment from the Exchequer — but nevertheless the 2012 IBRC promissory note payment was settled and so the term "non-payment" does not arise in this case. The benefits to the Exchequer from this transaction mainly relate to an improved cash position and more flexibility around funding.
Under the terms of the ECOFIN Council decision of December 2010 upon entering the EU/IMF Programme, there are General Government deficit targets which we must adhere to each year. This year that deficit must be no greater than 8.6 per cent of GDP.
Payment of this year's €3.06 billion IBRC promissory note instalment was not due to have any impact on the General Government deficit this year as the full €30.6 billion IBRC promissory note was included as part of the General Government deficit back in 2010. The fact that this year's payment was settled through a Government bond rather than with cash from the Exchequer does not therefore give scope for additional expenditure as this could jeopardise our budgetary targets. Furthermore, it must be acknowledged that given the very large deficits that we have been running for some years, it is important that we continue to close the gap that still exists between our expenditures and our revenues if we are to return the public finances to a sustainable position and protect future investment and growth.
In terms of targeted investment in infrastructure, it is the case that the Department of Public Expenditure and Reform has been actively engaged in identifying potential new sources of funding for projects where it makes sense and offers value for money for the State. The Government is now considering carefully what potential projects could be supported should a source of funding become available. It is likely that such investment would be focused on areas that meet the Government's key investment priorities, boost employment and help stimulate economic growth.
24 Deputy Michael McGrath asked the Minister for Finance his views on the impact of possible European assistance for the Spanish banking sector on Ireland’s efforts to reduce the cost incurred by this State in the rescue of banks; and if he will make a statement on the matter. [25574/12]
Amharc ar fhreagra47 Deputy Pearse Doherty asked the Minister for Finance if, in the event of any European mechanism being established to assist Spain to keep bank recapitalisation off the sovereign balance sheets, such a mechanism could be used retrospectively to assist Ireland. [25626/12]
Amharc ar fhreagraI propose to take Questions Nos. 24 and 47 together.
As the Deputy is aware the Government remains committed to reducing the cost incurred by the State in the rescue of the Irish Banks and to the protection of the States balance sheet. The recent agreement by the Troika to produce a common paper which will consider all options for the restructuring of the IRBC notes has the express purpose of determining if there is a way to reduce the overall cost to the State of the arrangements that were put in place to capitalise IBRC.
It is too early to make any assessment as to what mechanism will ultimately be arrived at in relation to the potential recapitalisation of the Spanish Banking Sector or to speculate as to how such mechanisms could if implemented be retrospectively utilised in Ireland. It should be borne in mind that the recent concerns in the Eurozone underpin the fact that the solutions to address the Spanish situation, as with the Irish situation, should be seen as part of an overall Eurozone/Global solution. We will continue to review the proposals that emerge in relation to the Spanish banks recapitalisation to ascertain if any of the proposed measures would have favourable applicability if implemented in Ireland.
