Mairead Farrell (Galway West, Sinn Fein) | Oireachtas source

Given the time constraints, I am going to put all my questions at the same time and then give the witnesses some time to come back with their answers. These questions are for Mr. O'Connor. In his opening statement, he stated that the cost of servicing debt is much more favourable than in the recent past. He also, however, stated: "Notwithstanding the support that low interest rates provide, we have to remain alert to the risks in the medium to long term posed by possible rising interest rates."

The past decade has demonstrated that interest rates, rather than being a function of debt and deficits, have been largely driven by the ECB and moreover we entered the present crisis with stubbornly low inflation rates. Crises of this kind accelerate pre-existing trends. Considering this, how likely is it that interest rates will rise in the medium term or is Mr. O'Connor warning that international markets could take a turn with the appetite for Irish Government bonds lessening and, as a result, interest rates increasing? Government bonds are considered safe assets to diversify investment portfolios but we have little information on those who buy our bonds. Can Mr. O'Connor give clarity on who holds these and can he give us a breakdown between ECB holdings versus private holdings? In his view are interest repayments now a better marker of debt sustainability than the total stock of debt?

I took a look at the NTMA's June investor presentation and noted slide 23 stated that most foreign-owned multinationals are shielded but that aircraft leasing is exposed and that there will be an estimated €250 billion hit to global passenger revenues due to Covid-19. In 2018 the CSO estimated that the size of total gross assets in the Irish aircraft leasing sector was around €140 billion. Over 50% of global aircraft are leased from Ireland, which in practical terms means that every two seconds an aircraft registered here is estimated to take off somewhere in the world. Despite the size of these assets, the contribution to direct employment is approximately 1,500 people. Given the onset of Covid-19 and the subsequent stay-at-home measures and restrictions on international travel, many of these assets are likely to become impaired. In Mr. O'Connor's view, what exposure does the Irish economy have if one or more of these large lessors were to fail?

I note also that in that presentation in slide 29 the NTMA said that once the Covid-19 stimulus ends, Ireland needs to narrow its deficit again. To me that implies a return to austerity. In Mr. O'Connor's view would a rush to austerity risk undermining the stimulus and jeopardising the recovery?

I have one last question. The programme for Government states that we will use any windfall gains such as the NAMA surplus, the final resolution of the liquidation of the IBRC or the scale of the State shareholdings in the banks to reduce our borrowing requirements. Would it not be better if this money were allocated for investment purposes or even to the temporary national recovery fund? Surely paying down debt at a time of crisis when the fiscal rules have also been suspended is a poor use of badly-needed public funds?