As the Deputy is aware, the Government has been fully committed to reviewing the arrangements that were put in place to capitalise IBRC. The purpose of this review was to determine if there is a way to reduce the overall cost to the State. In tandem with this review the troika have opened a discussion on how best the Irish banking system and the Irish State can benefit from having further improvements to certain elements of the banking sector. The overall purpose would be to enhance the position of banks in which the State has a major investment. The troika agreed to engage in this process to produce a common paper which will consider all options for restructuring the notes in terms of the source of funding, the duration of the notes, the interest rate, etc. The idea of the common paper was initially mooted in January / February of this year and there have been no firm deadlines to date as to the delivery of the paper.
The first step in this process was the settlement of the March 2012 promissory note repayment with a long term Government bond. While the development in relation to the end March payment was a positive development we have always been keeping our eye on the greater benefits which would derive from the re-engineering of the promissory note and also the potential improvements for the continuing banking sector which could also stem from the on-going technical discussions. It is for these reasons that the end March payment was seen as an initial step in a medium term process.
I have always stated that our problems are part of a wider European dilemma and any solution to address the Irish situation must be as part of an overall Eurozone/global solution. The recent shift in European policy in terms of breaking the vicious circle between the banks and the sovereign is to be welcomed and represents a major step forward. While the details, structures and arrangements have yet to be finalised the policy statement provides a basis for a Eurozone solution to what is essentially a Eurozone problem. Issues around the structuring and treatment of capital provided to the banks, including IBRC will be addressed in this context.
The Irish Government has been working extremely hard to secure a deal on the Irish bank debt and further detailed work will be stepped up to ensure that the positive moves in Europe are harnessed to maximise the benefit to the Irish taxpayer. This will be one of our key priorities between now and the end of year with the initial formal steps, at a European level, taking place at the Euro group meeting on 9th July.