Michael Noonan (Limerick City, Fine Gael)

The Deputy should get off the stage; he is a young man around here and he has a future if he gets off the stage and starts to be sincere on these issues.

Since coming into government we have explored options with our European partners on senior debt burden sharing. As I stated after my meeting with ECB President Trichet and Commissioner Rehn last month, our European partners expressed strong reservations about burden sharing with senior bondholders in IBRC. Mr. Trichet voiced his opinion that he is against such actions for two reasons: private sector involvement carries very significant contagion risk and may be inconsistent with encouraging private investors to return to markets and he said Ireland had done particularly well over the summer. He mentioned the narrowing of bond spreads and he said he felt that anything to do with senior debt burden sharing might knock the confidence of the market in the absolute commitment of the Government to take once again its place in normally functioning markets; as a result bond yields could widen again and we would lose the ground we had gained.

Mr. Trichet's views were echoed by Commissioner Rehn. The positive international commentary on Ireland has been created by the Government's successful renegotiation of the memorandum of understanding, the introduction of the jobs initiative, the sizeable reduction of the interest rate on the EU-IMF programme and the reduction in the cost of the banks to the taxpayer.

The value of support, present and future, we receive from our European partners far outweighs any short-term gain from imposing burden sharing on these bonds in the face of European opposition to such a move. For example, €110 billion of funding is provided by the ECB and the Central Bank of Ireland to the Irish banks at a cost below which they could borrow in the market. This is in addition to the €85 billion set out in the programme with the troika. However, we still have unfinished business with our partners to find the most cost effective way of resolving IBRC over the long term. Technical discussions between officials are underway at present on the IBRC promissory notes.

For these reasons I have decided not to take unilateral action on the burden. Have I much time left?

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