Michael Noonan (Limerick City, Fine Gael)

I propose to take Questions Nos. 21 and 22 together.

The joint EU-IMF programme of financial support for Ireland provides for a total financial package of €85 billion. Some €67.5 billion comes from the European funding facilities - that is the European financial stability mechanism, EFSM and the European financial Stability Facility, EFSF - bilateral loans from the UK Sweden and Denmark and the International Monetary Fund's extended loan facility, EFF. The remaining €17.5 billion comes from the State's own resources, namely the National Pensions Reserve Fund and other domestic cash balances.

Some €35 billion of the total €85 billion financial support package was originally set aside for the banking sector with the remaining €50 billion available for the purposes of financing the State. The recent banking stress tests carried out by the Central Bank identified an additional €24 billion in respect of the banking sector as being required, including €3 billion of funds which take the form of contingent capital. However, it is anticipated that mitigating actions, such as burden sharing with subordinate bondholders, will mean that up to €5 billion of this €24 billion will not have to be provided for by the State.

The budgetary forecasts contained in the recently published Stability Programme Update prudently assume that an additional €20 billion in State support to the banking sector will be required. On that basis, therefore, some €15 billion of the funding originally earmarked for the banking sector is now available for use for sovereign purposes, bringing the potential total available under the programme for sovereign purposes to €65 billion.

Based on the forecasts recently produced in the Stability Programme Update, the combined Exchequer deficits for the years 2011 to 2013 are estimated at €48.5 billion. Maturing Government debt, both long-term and short-term, over the same period amounts to some €27 billion, including an assumption for some short-term debt funding. In terms of our funding requirements for the individual years, factoring in Exchequer deficits and maturing debt, the State will require approximately €30 billion, €23 billion and €22.5 billion in each of the years 2011, 2012 and 2013.

It is the stated intention of the National Treasury Management Agency to return to sovereign debt markets as soon as market conditions permit. The steps necessary to enable such a return include resolution of the banking sector issues and continued progress in the reduction of the budget deficit in line with the targets agreed in the EU-IMF programme of financial support, together with the implementation of policies that will see us return to sustainable economic growth. A key development in that regard has been the publication of bank stress tests results on 31 March 2011 and the associated recapitalisation exercise which have been well received by investors and rating agencies alike.

The NTMA is in constant contact with market participants and will advise me when it feels that the time is right to re-enter the markets. I should say that, based on conservative projections of our funding needs and taking account of funding possibilities, there is no urgency about a return to the markets. Indeed, the purpose of a programme such as the EU-IMF programme for Ireland is to provide the space necessary for economic and financial adjustment to take place. Based on current projections and assuming no market access, the State has access to sufficient funds for its needs into the second half of 2013.

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