Brian Cowen (Laois-Offaly, Fianna Fail)

Deputy Gilmore suggested that this is a worse rate of interest than the deal with Greece and that is not correct. He probably knows this is not correct but it does not stop him trying to say it to the public now that there is an opportunity on national television. The rate of 5.8% over seven and a half years compares very favourably with the 5.2% over three years obtained by Greece. If it is such a bad deal, why is Greece looking for terms like ours?

Greece has now indicated to the European Union it would like to have similar terms. If it is such a bad deal, is Deputy Gilmore suggesting the Greek President is seeking a worse deal than the one he already negotiated? Clearly that is not the case; Deputy Gilmore's assertion is not correct and I will dispense with it on that basis.

Second, on the question of whether this was a good deal, on the basis of those negotiations, the Government went in with a four year plan that provides a forward path. It does provide, on the recommendation of the Governor of the Central Bank and the chief executive of the National Treasury Management Agency, the best deal under the circumstances in which we find ourselves. I simply asked a question: what is the alternative? Is the Deputy suggesting that moneys are available from Europe under more favourable terms than those offered by the IMF? This is a technical matter, but the interest rate that applies to moneys from the IMF is the same as that of one of the European funds - 5.7% - while another European fund has an interest rate of 6.05%. The composite rate is 5.8%. It is not correct to suggest a better deal was available, because the basis of the calculation of interest is set out by those organisations. We also made sure, on the European side, that we were given interest rates comparable with that available from the IMF, since this was the first time one of the European funds had ever been used. Again, the assertion made by the Opposition was not correct.

On the question of whether this will tie the hands of future Governments, it is a matter for this or a future Government to decide whether it wants to draw down money from the facility. The terms and conditions upon which European partners are prepared to provide those facilities are set out. Therefore, there is no fettering of future Governments. If a future Government could go back to the markets to borrow at better rates than are available now, of course it would do so. That is what any Government would do. At the moment, however, given the market dislocation, this money is available far more cheaply than on international money markets. They are the only places from which we can obtain money. Eighty-five percent of our bonds are held by international investors. Where else do the Opposition Members suggest the money be obtained? We can obtain it either on the money markets at 9% or on the terms of our European partners at 5.8%. It is all right to come to the House and suggest otherwise, but those are the facts of the matter.

Deputy Gilmore asked about the possibility of putting the agreement to the House. The first instalment of money will be in the 2011 budget. Even if we had never had a banking crisis, our income level is much lower than our spending.

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