Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I will comment briefly on the word "sustainability", which is used in two senses. It is used colloquially, such as when people say it will be very hard for Ireland to deal with servicing this bank debt with sustainability. When people use it in debate, they do not mean we will default but rather that life is being made difficult for everybody and taxpayers in particular. It is also used in a very narrow sense, effectively meaning that if a country's debt position is not sustainable, the country will default. In the first sense I agree with the Deputy and the IMF analysis but in the second sense I do not. There is no question of us defaulting. The position is that if our debt peaks at 120% or 121%, we can still service it and it remains sustainable in that sense. Nevertheless, it would put a very severe burden on the taxpayer, and the amount of resources dedicated to servicing a debt of that level would inhibit growth rates. The Secretary General of the Department, in speaking to the committee yesterday, used the metaphor of driving a car with the handbrake on. When speaking about sustainability, particularly with regard to the IMF, it is not an inability to pay that is discussed but rather the difficulty in paying, the burden placed on the taxpayer and the inhibition of growth rates.

There have been various interchanges since 29 June, particularly involving the Taoiseach and Chancellor Merkel, and both on the telephone and in face-to-face meetings. The German finance Minister came to Farmleigh the week before to meet with the Minister for Public Expenditure and Reform, Deputy Howlin, and I had a lengthy meeting with him. He reaffirmed the position of Chancellor Merkel so there is nothing new to add to the position already stated. It has been recited, parsed and analysed on a number of occasions in the joint statements made by the Taoiseach and Chancellor Merkel and after the Minister, Deputy Howlin, and I met Mr. Schäuble. There was a press conference after our meeting and the German Finance Minister quoted Chancellor Merkel in expressing the exact policy position of the federal government.