Michael Noonan (Limerick City, Fine Gael)

It is difficult to reply to that contribution, but I will try to do so. There are two policy streams involved here. First, we must get to a point where what we collect in tax matches what we spend. As long as we are running deficits, there is a large gap between the two. That is the fiscal side of it, and we have committed to reducing the deficit to €8.6 billion at the end of this year, to below €7.5 billion next year and to 3% of GDP by 2015. The other aspect is that we want to return to the markets and to be able to borrow again and repay our debt. One influences the other, but the promissory note issue is really about the sustainability of the Irish debt position and improving our possibility of returning to the markets rather than having much to do with the annual budget.

It is true that an extra €90 million will have to be paid as a result of the arrangement, which must come out of the 2012 figures, but there is no need to make any adjustments because we can cover this amount, as we see it at present, within the figures in the budget. As such, there is no question of any additional expenditure cuts. As I said already, debt servicing in the first quarter is €70 million behind where we estimated. There is always slight movement on figures within the context of a budget which comprises €36 billion in tax plus a significant borrowing requirement after that. In that context, €90 million is within the swings and balances of the budgetary position. We will not be making policy decisions as a consequence of this deficit adjustment other than that we are aware of it and it must be paid.

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