Dr. Thomas Conefrey:

In our reports we have been keeping track not only of Government debt and liabilities on balance sheet but also the contingent liabilities of the State, which at one point during the crisis were large. In terms of how outsiders view the Irish economy, they took these contingent liabilities almost as seriously as actual Government debt on the balance sheet.

In addition to the positive news we have seen in terms of the decline in Government debt, we have seen a decline in the size of these contingent liabilities. As we remarked in our November report, this is also an important part of the progress we have seen in the last couple of years. The contingent liabilities have declined. It has been pointed out that the potential exists for some gain to the State. We have done some very aggregate calculations based on publicly available information and estimates of possible maximum gains to the State from recouping the funds invested in the banking system. It would come to approximately 8% of GDP. It would be a one-off reduction in the debt to GDP ratio. It is welcome that these contingent liabilities have reduced in size. It is now plausible that there could be a return to the State from their sale. It would be a one-off gain that would shift the debt to GDP ratio lower. In that sense, it would be important not to overstate it.