Dáil debates

Wednesday, 12 January 2011

2:30 pm

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)

As is normal in these circumstances, officials of my Department are in ongoing contact with their counterparts in the EU Commission, the IMF and the ECB with regard to implementation of the joint programme of financial assistance agreed for Ireland. I understand that frequent contact is also taking place between the staff of the Central Bank, the Financial Regulator's office and the external funding agents.

The policy conditionality associated with the EU-IMF programme for Ireland is set out in the memorandum of economic and financial policies and in the memorandum of understanding on specific economic policy conditionality. These documents, together with the technical memorandum of understanding, which are collectively referred to as the MoU, have been laid before the Houses of the Oireachtas.

As regards the fiscal consolidation aspects of the agreement, as the Deputy will be aware, the release of the first instalments of financial assistance is conditional on the successful adoption of budget 2011. In this regard, the Social Welfare Act 2010 is in force and the finance Bill 2011 is due to be published on 20 January 2011. As part of the quantitative performance criteria of the technical memorandum of understanding, a target for the end-2010 Exchequer primary balance – the Exchequer balance excluding debt interest payments – of minus €15.3 billion was set. Excluding debt interest payments of just under €4.1 billion, the Exchequer primary balance in 2010 was minus €14.65 billion, meaning the target was met. This data was relayed to the IMF, European Commission and European Central Bank on Wednesday, 5 January. I can also confirm that the data provision obligations on my Department, the NTMA and the Central Bank are being pursued in line with annex 1 of the memorandum of understanding. The technical memorandum of understanding also set targets for cumulative end-quarterly Exchequer primary balances in 2011. There has so far been no reason to change these targets.

In the financial sector, the Deputy will be aware that the memorandum of understanding sets out a deadline of end-December 2010 for agreement with the Irish authorities and the ECB, European Commission and the IMF on agreed loan to deposit ratios for each of the banks. However, following further discussions with the ECB, EU and IMF, it has been agreed that it would be more appropriate to decide on the loan to deposit ratios for 2013 when the information from the prudential capital assessment review and the prudential liquidity assessment plan is available. This does not in any way diminish the commitment to appropriate restructuring of the banks in the relevant period.

Comments

No comments

Log in or join to post a public comment.