Mr. Seamus Coffey:

The refinancing environment is relatively benign. The NTMA experiences significant demand when it issues bonds and far more than the amount it wishes to raise. The rates at which debt is being issued are historically low. The current refinancing environment is relatively benign but Irish experience shows that can change very quickly. If one goes back to 2006 and 2007, similar comments were made about our ability to refinance debt and the margin we were paying relative to larger countries such as Germany. While the environment may look relatively benign now, it can change quite quickly.

One issue with regard to Ireland is whether people are paying that much attention to what is going on, particularly if standard international metrics are done in terms of GDP. If one looks at the chart, Ireland's net debt to GDP is below 60%. People might view that as being a safe level. We are of the view that greater use should be made of the alternative measures provided by the CSO such as GNI* which would put our net debt ratio at about 100%. If we require to borrow significant amounts in the future, it leaves us with limited borrowing capacity. At present we are refinancing debt and doing so quite easily. There are legitimate reasons for Governments to borrow and run deficits. If we hit circumstances where large deficits need to be run and perhaps should be run, we may find there are difficulties in raising the amount of money and in refinancing debt. Our concern is the debt remains high. It is on a downward trajectory but we should look carefully at the level and continue to bring it down.