Brian Lenihan Jnr (Dublin West, Fianna Fail)

The Deputy asked a number of questions. In respect of my level of awareness, at all stages prior to the execution of the promissory notes this year, my Department advised me that there were difficulties in the context of EUROSTAT's treatment of this matter with regard to the capital sums that we would be obliged to pay on foot of those notes. My officials also advised me at all stages on the capital implications that would arise. In other words, it was made clear that they could lead to a substantial increase in the debt to GDP ratio for this year. Having consulted the Governor of the Central Bank, I took the view that the best course would be to ensure the maximum amount of that exposure - in terms of the capital embodied in the notes - would be taken on the general Government balance this year. This means that next year the Government - and whatever Administration is in place in 2012 - would not be saddled with any further once-off spikes in the general Government balance caused by the capital treatment of promissory notes.

It was drawn to my attention in September that there would be implications for the general Government balance in future years in respect of the interest payments to which the Deputy refers. Various solutions were explored by my officials long before she adverted to the matter. On the question of the interest rate that will apply in respect of any note which must be structured prior to the end of the year, I will examine any suggestion the Deputy may wish to put forward and my officials will consider the various options.

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