Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move amendment No. 5:

In page 4, between lines 7 and 8, to insert the following:“3. The Minister shall, within 3 months of the enactment of this Act, lay before both Houses of the Oireachtas a report on the operation of the Securities Markets Programme of the European Central Bank insofar as it affects Ireland.”.

I do not have a difficulty with the provisions in this Bill concerning the payments for Greece. There was a comprehensive statement on Second Stage as to why Ireland will not benefit from a similar initiative.
In February 2013, the European Central Bank, ECB, reported its holdings under the securities markets programme, SMP, for the first time. It stated it held Irish Government bonds at a book value then of €13.6 billion and a market value of €14.4 billion, 8.8% of gross domestic product, GDP, at the time, with an average maturity of 4.6 years. The profit to the holder of the bonds comes in two forms, the annual coupon or interest and capital appreciation. I want to focus on the issue of the coupon and the question as to whether Ireland should get some relief on the interest on these bonds. Given there has been some redemption of bonds in the meantime, it is possible the ECB’s holdings are approximately €10 billion. At a rough annual coupon of 5%, we are paying €500 million in interest on these bonds held by the ECB and, ultimately, to national central banks which are in turn borrowing at 0.25% from the ECB. Ireland has a large interest bill of between €8 billion to €9 billion per annum. It is possible that almost €500 million of that is going through the ECB to national central banks.
If that money were recycled for Ireland in the same way it will be for Greece, it would represent a significant boost to the Exchequer. I do not believe the Government has made such a case to the authorities. The Minister probably does not believe it is a good idea because we are in a different position to Greece’s, as has been outlined. It would not, however, represent debt write-down but would be just an initiative in respect of the interest we pay to the ECB on these bonds acquired through the secondary markets. What is the Government’s position on this?