Mr. Seamus Coffey:

One of the reasons we have concerns about the debt is its scale and size. While our debt burden is being reduced, it is still quite high. The improvement can be exaggerated in using GDP, but, as we know, a large part of it is not increasing our ability to service our debt. Therefore, we favour GNI* as a better measure of national income. In terms of the various figures used, the Stability and Growth Pact refers to a figure of 60% of GDP, but that is not a target but a limit. It refers to the highest figure it should be. The issue with the Stability and Growth Pact is that if one is above that figure, one should be on a plan to reduce it to 60%. If one continues to adhere to the fiscal rules, it should fall below it. As I said, it is a limit rather than a target. As my colleague has pointed out, when we entered the crisis in 2008, our debt-to-GDP ratio was 25%, but that was not enough to deal with the impact of the negative shock we experienced at the time. By adhering naturally to the rules and running a balanced budget in structural terms, we will bring debt levels down.

The refinancing risks are quite significant, but we have a certain buffer available in terms of the cash balances managed by the NTMA which has been quite successful in the past three to four years in reducing some of the large windows of refinancing we have faced. I am not sure that in the current environment they present a huge risk, particularly as these debts are being refinanced at much lower interest rates than they were issued at initially. If these low interest rates continue for the next two or three years, the large amount of debt to which the Deputy referred should and will be refinanced at lower rates, reducing our interest costs further.