Brian Lenihan Jnr (Dublin West, Fianna Fail)

In general terms, longer-term money gives greater security. It is also important to bear in mind that Greece was facing an immediate funding wall for what I will describe as the Greek Exchequer. I am not sure if the term "Exchequer" is used in Greece. We should use "Central Fund", the term used in the Constitution. The expression "Exchequer" has survived in our financial procedures. The position in Greece was different in that respect and also to the extent that while the Greek banking system came under severe pressure - it was downgraded and had to avail of unlimited liquidity facilities from the European Central Bank during the period of the pressure - the issue of standing behind the banking system in terms of stability was not crucial in the Greek case. In the Irish case, we can see that while the Exchequer has certain short-term balances in terms of cash reserves, it also has much more substantial reserves in the pension fund. While there is considerable reserve firepower available to the Exchequer, there is the issue of putting beyond doubt in a contingent way the fact that moneys can be accessed by the Exchequer for Exchequer purposes.

I believe Deputy Burton touched on this point during her contribution in a question on when was it envisaged that Ireland would return to the bond markets. It of course is envisaged that we should be in a position to return to the bond markets if this arrangement can demonstrate both a funding capacity for Ireland and a confidence that the terms and nature of the programme are such that it assists the economy on a sustainable path. At the heart of these discussions is the question of the sustainability of the amount of borrowing involved and the interest rates applicable, which is the reason I am not at liberty at this stage to disclose matters of negotiation in that regard.

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