Dáil debates

Wednesday, 24 October 2012

European Council Meeting: Statements

 

12:15 pm

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

I thank the Taoiseach.

My fundamental question is as follows: What, in essence, is the Taoiseach's definition of debt sustainability for Ireland and could he explain to the House exactly what he is looking for in the negotiations in the context of the euro group and the euro summits? According to the Taoiseach, Ireland is unique. I accept that because it had the European position imposed upon it which resulted in the sovereign having to take on the debts of all the banks. Those specific circumstances, we are now told, are what the eurozone Finance Ministers will taken into account when considering Ireland's case while negotiating the role of the ESM in supporting banks. In simple terms, given that our banks are recapitalised, is the State looking to sell its stake in the banks to the ESM, is the Taoiseach insisting, if we are to go down that route, that this will be done at the price at which they were taken onto the books of the State, that is, a book value of approximately €29.4 billion, and has he examined the wider implications of what it would mean for the Irish economy to have the banks in the hands of the ESM?

On the promissory note, the funding cost is quite low as the Central Bank effectively borrows the money it lends to IRBC from the European Central Bank at a very low interest rate. Obviously, the cost is the capital payment that we make because we must borrow that money on the open market at the prevailing rate. The Holy Grail would be to kick it out over an extended period at a very low interest rate. Is the Government demanding, in the absence of a specific write-down - the Taoiseach might clarify that he is not looking for a write-down - an extended period of time to pay the debt at a low interest rate? My party would argue that it could be in the form of a zero coupon bullet bond over 40 years. Is that what the Taoiseach is looking for? Would he answer those two questions succinctly?

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