Brian Cowen (Laois-Offaly, Fianna Fail)

The Deputy used the minute available to him and more in order to make his points. He should allow me to reply.

I wish to make a serious point. It is unrealistic to suggest that the European Union has not shown a preparedness to assist Ireland in this situation. Two thirds of the facility available to us will come from European Union sources and the remaining third will be provided by the IMF. It is also unrealistic to suggest that there are rates of credit available within the European mechanism which would be cheaper than those relating to the IMF mechanism. As already stated, we are discussing lender-of-last-resort status. In that context, we must ensure we can return to the markets when conditions normalise. Prior to the serious turbulence which arose on markets during the year, Ireland was obtaining money at average rates of 4.5% to 5%.

Making a return to funding our operations through the international bond markets, in more normal conditions and as quickly as possible, is the reason we have been provided with a facility from which we can drawn down moneys as required. It is hoped that while we pursue the programme of adjustment in which we are already engaged, the bond markets should normalise and we will then be able to return to them and obtain money at rates which would be lower than those which apply in respect of the funding we are obtaining from the sources to which I refer. That is the purpose of what is being done.

The facility is for three years and it seeks to ensure we can return to the bond markets on the basis of the adjustments we will make in the interim. As already stated, it is a misnomer to continually refer to a penalty when what is on offer is comparable to what is available from the cheapest source of international credit, namely, the IMF. It is important to recognise that the lender-of-last-resort facility is available to Ireland for the first time since the mechanism was established. The mechanism in question was set up by the ECOFIN Council, which involves all 27 member states, and is distinct from the stabilisation facility which was established by the eurozone countries. It is vital to point out that the financial assistance to which I refer is on offer at a far lower cost than the only alternative available, namely, funding from the secondary markets where rates of well over 8% currently apply.

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