Written Answers Nos. 73-79
73. Deputy Michael McGrath asked the Minister for Finance if he will provide details of his assertion that the extension of loan maturities in respect of Ireland's borrowings drawn down from the EFSF and EFSM could save the country billions of euro; if he will specify the assumptions underpinning this calculation; and if he will make a statement on the matter. [4720/13]
Amharc ar fhreagraAt the meetings of Eurogroup and ECOFIN Finance Ministers on 21 and 22 January 2013, respectively, it was agreed that the requests by Portugal and Ireland for an extension of maturities would be considered by senior officials and would then come back to Finance Ministers for further consideration. In my comments to the media following these meetings I made the point that it would be premature to quote any precise figures for possible savings as the details remain to be worked out, but I noted that this proposal could yield significant savings over time which could be in billions rather than in hundreds of millions of euro.
As the issue is still under discussion, the details of any extension agreed are not yet known. The views of all Euro Area and EU Member States, along with those of the EFSF and EFSM, will need to be taken into account. The savings arising will depend on a number of factors – the amount of loans for which a maturity extension is agreed, the length of any maturity extension, and the assumption made about the extent to which the EFSF and EFSM borrowings are cheaper than borrowings by Ireland. As I have already outlined, the level of loans and the length of the maturity remain to be agreed, while the assumption of the interest rate differential is ultimately a matter of judgement. There is a broad range of possible scenarios in that regard. It is worth noting that at present the differential between 10 year Irish and EFSF and EFSM borrowing costs would be about 2.5%. I would stress, however, that any scenarios are highly tentative and sensitive to the assumptions concerning the amount of loans covered, the maturity extension granted and the interest differential applied.
74. Deputy Michael McGrath asked the Minister for Finance if he will provide details on the current status of the negotiations with the European Central Bank regarding the promissory notes; the person who is negotiating on Ireland's behalf; the objective of the negotiations; and if he will make a statement on the matter. [4721/13]
Amharc ar fhreagraAs the deputies are aware, the Irish Government has been working extremely hard to secure a deal on the Irish bank debt with our European partners and detailed work will continue to ensure that positive moves in Europe are harnessed to maximise the benefit to the Irish taxpayer. This work is one of the Government’s key priorities and will remain a key focus during the EU presidency.
Officials within my department, the NTMA and the Central Bank of Ireland have been involved in these negotiations on Ireland’s behalf. As previously advised to the house, the terms sought by the Government are those which achieve the best possible outcome for the Irish taxpayer and the objective of the negotiations is to achieve consensus based on these terms. It is not possible to give guidance on the timing or potential outcome of the discussions as to do so could impede our ability to achieve the best possible results, but every effort is being made to expedite the on-going process. I have previously stated that I am working to try and achieve a solution before the next scheduled instalment on the Promissory Note scheduled for March. It would be very difficult for Ireland to make a payment on the Promissory Notes and so we continue to work on a deal with our European partners to resolve this issue.
75. Deputy Michael McGrath asked the Minister for Finance if he will provide details of the precautionary line of credit from the ESM and IMF currently under consideration with the Troika as part of our exit strategy from the EU/ECB/IMF programme of assistance; if it is his objective to secure such backstop funding; the conditionality that may be attached; and if he will make a statement on the matter. [4722/13]
Amharc ar fhreagraAs I outlined in my reply to similar question from the Deputy yesterday, Ireland is entering the final year of our EU/IMF programme of financial assistance and we are preparing to exit that programme. By way of information, both the IMF and the European Stability Mechanism (ESM) can provide precautionary financial assistance.
The ESM Treaty provides, in Article 14, that the Board of Governors may decide to grant precautionary financial assistance in the form of a precautionary conditioned credit line (PCCL) or in the form of an enhanced conditions credit line (ECCL). The Treaty also provides for the conditionality, terms and conditions to be attached to such assistance. Further information in relation to these instruments is available on the ESM website at http://www.esm.europa.eu/.
The IMF has a number of precautionary or stand-by type facilities including Flexible Credit Line (FCL), the Precautionary and Liquidity Line (PLL), the Extended Funding Facility (EFF) and the Stand By Arrangement (SBA). These different instruments are designed to address different sets of circumstances, and the terms and conditions attaching to them are structured accordingly. Further information on these instruments is available on the IMF website at http://www.imf.org/.
At the end of the eighth EU/IMF review mission, in October, I indicated that we would be discussing the measures necessary for a successful exit with the Troika. Discussions with Troika officials on exit options will be part of the ninth review mission, which started yesterday. All relevant options will be considered in the light of what is appropriate for Ireland, including the terms and conditions attaching to them. Evidently this will require further consideration and no decisions have been taken to date.
Question No. 76 answered with Question No. 69.
77. Deputy Michael McGrath asked the Minister for Finance if he will provide details separately in respect of each covered institution of the sale of any part of their mortgage book for each of the years 2010, 2011 and 2012; the implications of these sales; if there are any consequence for the individual bank customers concerned; and if he will make a statement on the matter. [4724/13]
Amharc ar fhreagraThe sale of loan portfolios is a commercial matter for the management and the Board of the Institutions. I have a limited role in this function.
Allied Irish Banks (AIB) informs me that it has sold mortgage portfolios as part of its continuing strategy to meet non-core deleveraging targets set out by the Central Bank of Ireland as part of PLAR 2011 and to assist with viability enhancing measures. Similarly, Bank of Ireland (BOI) has sold loan books in the United Kingdom as part of its non-core deleveraging plan. Neither Permanent TSB (PTSB) nor IBRC have sold mortgage loan books in 2010, 2011 or 2012, however, PTSB have recently sold the rights to a small number of mortgage loan agreements as part of a larger transaction.
Any relevant disclosures in respect of these portfolio sales are made in the Annual Financial Reports or via stock exchange announcements. In the case of any transactions where the sale of mortgages occurs, affected borrowers will continue to remain liable for the full amount of their debt. The loan terms and conditions of borrowers whose loans form part of any sale remain unchanged and are not impacted by the transfer of their loans.
Deleveraging of the Banking system has progressed well. Deleveraging of €54.9bn has been achieved by AIB, BOI and PTSB from 31 December 2010 to 30 November 2012. The sales prices on portfolio sales may not in all cases have been disclosed by the banks due to commercial sensitivities and confidentiality of information. AIB and BOI where disposals have been concentrated have disclosed that overall cumulative discounts incurred have been within PCAR assumed discounts. From a capital perspective, the loss incurred on the divestment of these assets is broadly offset by a reduction in the level of risk weighted assets.
The on-going progress in deleveraging and deposit gathering activities has seen BOI make further progress towards improving its Loan to Deposit (LDR) ratio, reducing from 136% at June 2012 to less than 130% in November 2012. Similarly, AIB’s LDR reduced to less than 120% at the end of October (including loans held for sale) from 125% at end of June.
78. Deputy Mary Lou McDonald asked the Minister for Finance when a reply will issue to Parliamentary Question No. 96 of 17 October 2012. [4779/13]
Amharc ar fhreagraThe reply to this parliamentary question issued from my office today. As I indicated to the Deputy in my response to parliamentary question number 2018/13, several factors contributed to the delay in replying to this parliamentary question. The scope of the question, both in terms of the number of calendar years included in the request, the inclusion of bodies and state agencies under the remit of my Department, and the level of data requested for each item, meant that the compilation of the data in order to provide a full response to the questions was time-consuming and voluminous. Furthermore, the questions were received at a time when staff responsible for compiling the data for their respective Offices were also heavily involved in the Estimates process and subsequently the year end process. These questions were not therefore simply confined to information in relation to my Department. Had this been the case a reply would have been available immediately.
79. D'fhiafraigh Deputy Peadar Tóibín den Aire Oideachais agus Scileanna cad é éifeacht an cinneadh a rinne sé COGG a thabhairt faoi bhráid CNCM; cad iad na himpleachtaí a bheidh ag an gcinneadh sin i dtaca leis an Straitéis 20 Bliain don Ghaeilge; agus an ndéanfaidh sé ráiteas ina thaobh. [4707/13]
Amharc ar fhreagraCabinet discussions are confidential and I am not in a position to give details of discussions between Ministers. I can address the second part of the question. In reaching this decision, I paid particular attention to the context of our support not only for the 20 Year Strategy for the Irish Language 2010-2030 but also to the Education Act, 1998, to the implementation of the Gaeltacht Act 2012, the recommendations in the Literacy and Numeracy for Learning and Life - The National Strategy to Improve Literacy and Numeracy among Children and Young People 2011 - 2020 and to the implementation of the Framework for Junior Cycle which I published last October.
I believe that the amalgamation of An Chomhairle um Oideachas Gaeltachta agus Gaelscolaíochta (COGG) with the NCCA will enhance the capacity of COGG to meet its statutory functions The NCCA has a significant amount of work currently under way or about to be started on the Irish language in our schools. The new arrangement will maximise the possibilities for collaboration and cooperation between both bodies. As the NCCA will prepare curricula for Irish for my consideration, COGG will develop resources that will compliment the curricula and thereby enhance the quality of the teaching and learning of Irish for our students. COGG will therefore continue to plan and co-ordinate for the provision of resources for the teaching and learning of Irish and to advise on and support teaching through Irish.
