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

It is early in the year. Before I came here this evening I looked at the spreads. I do not have them with me. The ten year bond is down to the level where the five year bond was a couple of months ago. It is down to approximately 3.5% this evening, while the five year bond is approximately 2.3%. We are moving towards historically low rates of interest. On the present trajectory, it appears it would be possible to fund all our requirements on the open market if we wish to do that. However, there are other considerations. We are looking at a deficit of approximately €1 billion per month, and we need €12 billion to make our expenditure match our tax take. That is the gap. There are also bonds maturing and we must roll those over. The raw figure for what we need this year is approximately €17 billion. We still have €7 billion to draw down from the European funds and the IMF. There would not be a big advantage in drawing down those funds in terms of the interest rate applying, but the maturities on the European funds are approximately 20 years. In terms of maturities, there is a significant advantage in accessing the European money rather than market money, even though there is not a lot in the interest rate. I rely a great deal on the NTMA to make the calls on this. We will see how it progresses as the year goes by. However, we are in a good position at present, and there are cash reserves above €25 billion in the NTMA . That is prudence. We saw what happened in Cyprus and the resulting shock wave. What if Italy had not formed a government? There can be a shock wave, particularly from a big country, so we must over-provision in the interests of prudence.