Ms Ann Nolan:

We have looked extensively at the question of what is optimal in our discussions with NAMA last year and this year. While there are competing factors within the system, it would be fair to say that the elimination of all those contingent liabilities has been one of the big successes for Ireland Inc. and the overall economy in the 18 months since we left the programme.

The issue concerns the elimination of all these contingent liabilities. We were having difficulty in borrowing, not just because of the level of our debt which was big but also because it was perceived by the market, regardless of whether we liked it, that the residual IBRC was a weight on the Irish taxpayer because of the guarantee. The guarantee in the case of NAMA was also perceived as a weight on the Irish taxpayer. The fact that NAMA has repaid the best part of 60% of its debt and IBRC has repaid all the Government-guaranteed part of its debt is a big factor in how the market has recovered. The question of a further overhang always has to be balanced with the benefit to be gained; there is a benefit to be gained in getting rid of it as well as in holding on to it.

We have looked at strategic areas where a long-term investment and State involvement would be particularly useful, the main one being the housing market in the big cities where NAMA has the capacity to build houses that the rest of the system does not seem to be able to deliver. It is providing 4,500 houses in the big cities. Another example is the strategic development zones, particularly in the Dublin docklands where it does not have complete ownership but an interest in a huge amount property.