Michael Noonan (Limerick City, Fine Gael)

The €90 million is the estimated difference, for the remainder of 2012, between borrowing under the programme at an estimated 3.5% and the impact on the deficit of the new Government bond. The State is the ultimate beneficiary as the coupon on the new Government bond is paid to its wholly owned subsidiary, IBRC.

My Department is currently updating its macroeconomic and fiscal assessment for the forthcoming stability programme update, SPU. The SPU will give an update of, among other things, the general Government deficit estimate for 2012, taking account of all of the latest available economic and fiscal data, both positive and negative. The SPU will be published at the end of the month. On foot of the Exchequer returns for the first quarter of the year, I am confident we will meet our budgetary targets for the year.

The ECB had expressed a clear preference that the financing arrangement would be between IBRC and a bank that was not in majority State ownership. The transaction would then be financed by Bank of Ireland, through standard ECB money market operations, using the Irish Government bonds issued as collateral. As NAMA had the funds available, as a short term interim measure, pending the results of Bank of Ireland's shareholders' vote, I directed that the financing of the bond would be through a collateralised facility provided by NAMA to IBRC on equivalent commercial terms as the financing with Bank of Ireland.

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