Michael Noonan (Limerick City, Fine Gael)

The Deputy is correct that the level of growth in the economy is a very important component of whether the debt continues to be manageable but equally important is the size of the debt and the interest rate charged on the debt. It is a combination of three inputs.

On the growth rates projected in the stability programme update put before the Houses of the Oireachtas last Friday, the Deputy will have to remember that it is on the estimate of his Government's budget that the adjustments have been made. The previous figures were those brought before the House by my predecessor in January when the budget was introduced. A number of things have happened since. First, at that stage only €10 billion was pencilled in arising from the stress tests and that has now gone up to €24 billion. As well as that, events in North Africa have pushed up the price of oil, and interest rates internationally are tending upwards. Various factors are now coming through, therefore.

It is true to say that the Department of Finance is slightly ahead of the projections of the European Commission and the IMF but the IMF took a €35 billion injection into recapitalisation of the banks and the EU Commission took a €25 billion investment into the recapitalisation of the banks when they were working out their figures. I said previously when launching the initiative on the banks, and much to the amusement of some of our learned people in the media, that growth is not a static figure. Sometimes people talk about growth as if it was fixed and that nothing could be done about it. Obviously, Government policies influence growth as well and I suggest to the Deputy that the policies we are pursuing now will have an influence on growth going forward.

See this speech in context