Brian Lenihan Jnr (Dublin West, Fianna Fail)

The international team with whom we negotiated the joint programme agreed wholeheartedly with our national recovery plan, and the fiscal and banking measures that we have taken so far. The IMF described our measures as a clear and realistic package of policies to restore our banking system to health and put our public finances on a sound footing.

The interest rate being paid on the loans is 5.8%, on the basis of the market rates at the time of the agreement. This rate was set out on the day of the announcement of external assistance and it remains the interest rate today. The rate of interest charged by the IMF is calculated using the standard formula which it applies to all countries. This is a standard calculation. Greece sought that the terms of its loan be adjusted in line with what Ireland is receiving. This shows the good deal Ireland has negotiated.

In May of this year, the ECOFIN agreed that the European Financial Stabilisation Mechanism would have a margin. This was a general provision based on lending in a last resort situation. It applies to the Irish loan and it will apply to any future loans as well. The interest rate has been calculated at a level to ensure that it does not act as an impediment to economic growth.

This financial assistance is provided at a far lower cost than we would be able to access in the financial markets. At the moment, the yield on Irish Government bonds is over 8% in the secondary markets-----

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