Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

First, without going back on it, I would not agree with the Deputy's résumé of historic events from June 2012 leading on, but I will let that sit. The Deputy asked how was I occupied? I was occupied in making sure that the commitment made in a press statement was translated into article 14 of the guidelines and I have succeeded in doing that. He will recall that in the middle of that negotiation when the German, Dutch and Finish Finance Ministers got together in Helsinki they put out a statement, a loose translation of which would be "No way, José". We had to get that off the table and we took it step by step to the point where we have article 14 now. That is a mandate for retrospective recapitalisation by the ESM.

We have gone through what will happen when an application is made in terms of a decision on a case-by-case basis, modalities and all the rest of it, but the issues now for me are will it be worthwhile or can I do better in the markets. The Deputy said the game-changer is when the Irish people get their money back. It is my fullest intention that the Irish people will get their money back. We have got back more than what they put into Bank of Ireland already. When this commitment was given I am not sure what AIB was valued at but looking back on it I would have thought it was not worth more than €3 billion or so - that is a checkable figure - but now it has been independently valued at €11.5 billion and that was before it showed the profits it showed on the half year which surprised the markets in a very positive way, and I would suggest we could mark it up again. The total amount now is about €200 million.

I have talked to various colleagues informally. The outgoing Finance Minister in Sweden told me that in respect of their banking crisis that occurred in the early 1990s that they only sold the last tranche of the shares to the market last year and that they recovered two and half times what they had put in. That is in nominal terms, he had not indexed it. I took his advice and he said not be in hurry, to hold on to them, that the our economy is growing, that we have got two banks and that they will be very valuable when they are in a duopoly situation in an economy that will be growing steadily over the next period. I want to be totally and completely frank with the Deputy. That is one consideration.

The other consideration is the difficulty of the negotiation and I will tell the Deputy the reason for that. All the eurozone countries have contributed to the ESM fund, some of it by cash and some of it by guarantee. When the commitment was made our bond prices were way out but yesterday our ten-year bonds were trading at 163 basis points, and that puts us inside Portugal, Spain, Italy, Cyprus, Greece, Slovenia and some of the eastern countries. One has to ask what method of negotiation I can use to convince those countries that Ireland needs additional help to make it more sustainable in the market when we are trading so low and so far inside them.

I am not saying I am resiling from it, but I can see that because our situation has improved so much, it will be more difficult to convince colleagues, and anyway, the market alternative might be better. I am going to pursue this line and I will pursue the market alternative as well. We have brought it to the point at which we have the legal authority under Article 14, and we will see what is spelled out in November and if there is an accompanying statement around the November event. Then it is a question of timing as to when we apply. There may come a point at which it is not worth pursuing it and we may do better by pursuing the alternatives. The point about the game-changer is correct. It is when the taxpayer gets his money back. That is the game-changer.