Brendan Howlin (Wexford, Labour) | Oireachtas source

Three distinct questions have been put by the Chairman. First, there is what he classifies as the 50-50 split. It is absolutely true that in my first engagement with the troika it was clearly of the view - this is sometimes contested - that the agreement was that the proceeds of the sale of any State assets would be used to retire debt. It was adamant that would be the case. It took some time for the troika to move to the agreement with me that 50% of the actual proceeds could be reinvested in commercially viable enterprises that would generate jobs in the economy. It did not end there; I went back again to ask about the other 50%. What led me to do that was the difficulties we had in getting the first public-private partnerships back on track because we did not have an AAA-rated bank to partner the European Investment Bank for PPP proposals, as required by the bank's own internal statutes. I discovered that one of the things Greece was able to do was to use unspent structural funds as a backstop - a guarantee - and that was acceptable to the European Investment Bank. We did not have any unspent structural funds as we spend every euro. I thought we could use that money as a backstop, and that is one of the areas where we might be able to use the residual 50% before it eventually goes to pay down debt.

I want to make a comment about the debt. Although we have come a long way in the past two years in a very significant process, we have reprofiled the debt over a longer period. We have reduced the interest payments, saving us some €10 billion, and reduced the interest rate by 2.5%. We have torn up the promissory note and rescheduled the repayments on the promissory note - rather than having bullet payments on an annual basis of just over €3 billion - to a profile of 34 years on average, reducing the demand for money. All of that is true and it has taken the pressure off, but it does not take away from the fact that our debt will peak this year at €123% of GDP, which is still shockingly high. We are determined that it will be on a path of decline from this year. However, we cannot be negligent or blasé about the quantum of debt that still hangs over the Irish nation. That is something we want to deal with.

The third question was about the use of money to augment the NPRF. The Minister for Finance and I announced last week that we are winding up the National Pensions Reserve Fund and transferring its €6.4 billion into the new Irish Strategic Investment Fund. The need of this economy is for investment now. Our common view is that the best way to make provision for future pensions is to actually have a growing economy, because we pay for pensions on a yearly basis out of current Exchequer funds. Therefore, we need to ensure we have a growing economy and we need to create jobs now. The Chairman made a fair point that when we get back to something more normal in terms of economic growth we should look again to rebuilding a pension reserve fund into the future. However, the immediate priority in the medium term is to have capital to invest in infrastructure and jobs in our economy right now.