Tommy Broughan (Dublin North East, Labour)
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42. To ask the Minister for Finance the likely financial facility or line of credit that will be required from the financial institutions of the European Union for Ireland when it exits the current bailout programme later this year. [41298/13]

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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57. To ask the Minister for Finance the options being considered for additional funding or credit lines if Ireland leaves the troika programme and the level of conditionality each option would bring. [41504/13]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 42 and 57 together.

As the Deputy is aware, the EU-IMF Programme of Financial Support runs to December this year. The Government's focus is now firmly fixed on achieving a successful and durable exit from our programme. In this regard we are doing all that we can to achieve this end. We continue to meet our programme conditions and our strong implementation record has been recognised by our external partners and the financial markets.

The options available to Ireland on exiting the programme fall into two broad categories. A successful exit without any further support or a successful exit supported by the European Stability Mechanism's and the IMF's precautionary backstop facilities. The second option has been referred to as Ireland having an 'insurance policy' to guard against the possibility of unfavorable external events that might arise.

By way of information, both the IMF and the European Stability Mechanism (ESM) have a number of options available in relation to the precautionary financial assistance as follows. The ESM's 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). It also provides, at Articles 17 and 18 for primary and secondary market support facilities. 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 .

The IMF has a number of precautionary or standby 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 .

In the case of both the ESM and IMF precautionary facilities, the nature of the conditionality would depend on the type of facility agreed and also the specific circumstances of the country making the application. In general, such conditionality seeks to address the reasons underlying the application for assistance.

The ECB's Outright Monetary Transaction (OMT) is another potential support for countries exiting a programme. The Governing Council of the ECB made a decision to establish Outright Monetary Transaction (OMT) on 2 August 2012, and issued a Press Release on 6 September 2012 which outlined its technical features. According to this ECB Press Release, the purpose of OMT is: “Safeguarding an appropriate monetary policy transmission and the singleness of the monetary policy”. In the Press Release, the ECB noted in relation to the coverage of OMT that it “will be considered for Member States currently under a macroeconomic adjustment programme when they will be regaining bond market access.” The Press Release also sets out that a necessary condition for OMT is strict and effective conditionality attached to an appropriate European Financial Stability Facility/European Stability Mechanism EFSF/ESM programme.

Such programmes can take the form of a full EFSF/ESM macroeconomic adjustment programme or a precautionary programme (Enhanced Conditions Credit Line), provided that they include the possibility of EFSF/ESM primary market purchases. Finally the Press Release also notes that the ECB's Governing Council will decide on the start, continuation and suspension of OMT, following a thorough assessment, in full discretion and acting in accordance with its monetary policy mandate. The decision on whether to grant OMT or otherwise in any particular case is a matter for the ECB, which is an independent body.

Ireland will be the first euro country to exit an EU-IMF programme of this type. In this context, discussions on Ireland's exit from the Programme took place during the recent review missions and some further clarity on the possible options that might be available in terms of exit strategy was achieved. The issue will be considered further at the forthcoming Troika review scheduled for the second half of October. No decisions have been taken to date by Government on any of the possible options that Ireland might wish to pursue in this matter. However, all options that assist in supporting durable and sustainable future market funding will be considered in the light of what is appropriate for Ireland.