Michael McGrath (Cork South Central, Fianna Fail)

I thank the Office of the Ceann Comhairle for selecting this important item for discussion today. My motivation for raising it is to seek an update from the Minister on the Government's efforts to renegotiate the arrangement associated with the IBRC promissory notes, which, as we know, account for approximately €30.6 billion, and, in light of the recent developments in the eurozone, particularly Spain, to negotiate an overall reduction in the burden of bank related debt this State is carrying.

During the recent referendum campaign, the Taoiseach and Ministers were at pains at every opportunity to emphasise there was no connection between passing the treaty and obtaining a deal on Ireland's bank debt. However, no sooner were the votes counted than the Taoiseach, Tánaiste and Ministers were lining up to say the passage of the referendum would strengthen our case for obtaining a deal on the bank debt. In the immediate aftermath of the vote, the Taoiseach said the carrying of the referendum sent a message to EU leaders seeking a just deal on Ireland's bank debt. We have been informed that the Taoiseach raised this issue directly with Chancellor Merkel by telephone last Friday. However, the overtures by the Government have been flatly rejected publicly today by Mr. Mario Draghi, governor of the European Central Bank, and in recent days by a spokesperson for the German Finance Minister, Mr. Wolfgang Schäuble.

It is important to return to the issue of the promissory note. As we know, in March of this year, payment of the €3.06 billion that was due was kicked to touch for 12 months using a convoluted arrangement that involved NAMA and Bank of Ireland, subject to the approval of that bank's shareholders later this month. However, the Irish Central Bank was repaid the €3.06 billion it was due in emergency liquidity assistance. However, there is still €28 billion at play in respect of promissory notes, including the €3 billion that was deferred from this year and the remaining €25 billion.

As far back as September 2011, the Minister for Finance, Deputy Michael Noonan, advised us that the Government was in talks with the European authorities about negotiating the promissory note. In November, reference was made to the preparation of a technical paper. It is now June 2012 but we have seen no such paper, and we have no timeline for the completion of any such paper. What is the position on Ireland's efforts to renegotiate the promissory note structure?

In the Dáil, on 1 February, the Minister, Deputy Noonan, in response to a question I put to him, confirmed that the core Government objective was essentially to come up with a new financial arrangement at a lower coupon and over a longer period of time. Is that the Government's objective? Is the Government objective to repay this over a longer period of time and at a reduced interest rate or is it to reduce the principal - the face value of the amount of money that is owing?

The second question is, are the Government's ambitions to renegotiate the banking debt merely limited to the promissory note or is the Government determined to address the remaining €30 billion or so which was invested in Bank of Ireland, AIB and Permanent TSB through the National Pensions Reserve Fund and the cash reserves of the State which were to hand?

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