Dáil debates

Tuesday, 7 June 2011

3:00 pm

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)

I thank the Minister for his reply. It seems Ireland is being treated very unfairly on this issue. As the Minister acknowledged, the other two countries, Greece and Portugal, are benefiting from a lower interest rate. It is now three months since the Heads of Government at eurogroup level decided in principle there would be an interest rate reduction yet it has not been applied to Ireland.

According to media reports last weekend, approximately €23 billion of our facility has now been drawn down, which would represent over a third of the overall facility and is being levied at the higher interest rate. The Minister previously acknowledged that a 1% interest rate reduction on the European sources of funding under the facility would represent a saving of approximately €450 million a year, which would be very significant. By any objective measure, the elements of the EU-IMF agreement that have been renegotiated to date are very modest and have not resulted in a direct cash saving for the Exchequer. This is one change which would result in a saving and the sooner it happens, the better.

The one element not dealt with in the Minister's reply was when we might expect an outcome to these negotiations. Is the problem still with the French insistence on the corporation tax issue? Is progress being made? When does the Minister expect this to come to a head, one way or another?


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