Alex White (Dublin South, Labour) | Oireachtas source

I thank the Deputy for raising this issue and for his words of welcome. I welcome his welcome, if I might put it that way, for these important developments.

The meeting of the Eurogroup - the eurozone finance Ministers - yesterday had a broad agenda covering a number of issues, all of which related to the health of the euro and were important to Ireland. However, for the purpose of this discussion, I will refer to the outcome of the discussions on the extension of maturities on EU loans for Ireland and Portugal as well as the discussions on the European Stability Mechanism, ESM, direct banking recapitalisation facility.

The Eurogroup has agreed to examine the extension of the maturities on Ireland and Portugal's loans from the EFSF, the euro area facility. Last night, the Minister for Finance noted that this "is a very welcome and positive development" and that it "recognises the efforts being made by well performing programme countries". The Minister for Finance also clarified:

The Eurogroup agreed to refer this issue to senior officials to examine the technical details and they will report back shortly. This has the potential to further enhance Ireland's debt sustainability and to facilitate our successful full return to the markets.

I also remind the House that the ECOFIN meeting of all EU 27 finance Ministers has agreed to a similar request in respect of loans from the European financial stabilisation mechanism, EFSM - the EU 27 mechanism. Deputy McGrath has acknowledged that. These are important and potentially significant decisions. An extension of the maturities will be beneficial for this country as it will increase the amount of our debt with longer maturity. It has the potential to further enhance Ireland's debt sustainability and to improve our prospects of making a full return to the markets at competitive interest rates. That will mean private sector investors should be more willing to lend to Ireland, which should reduce the cost of our borrowing.

I should emphasise that this decision is only made possible by our consistent, strong track record of delivering on our programme commitments. It also reflects our considerable efforts in building support behind the scenes with our EU partners. The examination of the proposal will now be conducted by the European Commission and senior European officials, including Irish and Portuguese officials, to assess what loans will be eligible and the revised maturity dates. The advice of the NTMA will be a key element in our approach to this examination. The examination by senior officials should start immediately so that they will be in a position to report as soon as possible. The decisions taken last night and today serve as yet another example of the progress the Government is making at European level in reducing the cost of the EU-IMF programme entered into by the previous Administration. Coupled with the agreement secured in 2011 to reduce the interest rate on our loans, an agreement that saved the Irish taxpayer €9 billion in interest costs, we are making real progress in reducing the burden of the programme and positioning Ireland to make a full and sustained return to the markets at competitive rates.

The amount of funding potentially covered by these decisions is €22.5 billion for the EFSM and €17.7 billion for the EFSF. In the case of the ESM direct banking recapitalisation proposal, the Ministers received a report on the progress being made in the technical discussions. While further work remains to be done in this area, the Minister for Finance has stated that he is happy with progress to date. Our discussions on reducing the cost support to the banks, including the ESM direct recapitalisation, will continue and will deliver tangible results also.

See this speech in context