Mr. John Moran:

I cannot comment on what was or was not stated at the earlier stages. It has been recognised by Europe that the way in which the balance of responsibility lay early on – let us pick the beginning of the bailout – in terms of the sovereign and Europe’s participation in providing assistance was not the right one. It has been moved significantly in a number of ways since. There has been considerable assistance at the level of the sovereign. Ultimately, the capital invested in the banks was funded by sovereign debt on our side. This has been recognised through the reduction in interest rates and the extension of the maturity dates under the programme. Knock-on impacts are more difficult to quantify, but this has been incredibly important in reducing our cost of borrowing. As late as a year ago, we assumed that the State’s cost of borrowing would be 4.5%, but we are nearing 2.5%. One reason for this among others is the fact that almost 50% of the State's debt falls due beyond 2020. There is little pressure on the State to refinance that debt in the early years. A significant role was played by the extension in the maturity dates agreed by Europe in respect of the original bailout. Since the date of the bailout in 2010, there has been considerable movement.

The committee will remember our chart describing the amount that had been invested in the banks. We calculated the capital that had been invested in Anglo Irish Bank versus the other banks. The burden of what was invested in the former, which was essentially a decision to shore up that bank and may have formed a part of the discussion referred to by the official in question, fell entirely on the State with a significant repayment obligation. This was reflected in the promissory note transactions, under which it was a requirement to buy €3 billion of funds per year over a ten-year period. This burden was not removed, but it was pushed 25 and 35 years further down the road to relieve pressure on the State in the short term. As the committee knows, this was done with Europe’s co-operation.

The third element has been discussed, that being, the direct recapitalisation. I cannot tell the committee what will happen in that regard. An acknowledgement by the partners in Europe was reflected in the June statement and has been reflected in the documentation that has passed through various legislative processes concerning direct recapitalisation. There will be an opportunity for a discussion to examine situations on a case-by-case basis. Everyone around the table at least knows that the Irish expect to be discussed in this regard and to have Ireland's contribution to the euro’s stability recognised. However, we also need to remember-----