Eamon Gilmore (Dún Laoghaire, Labour) | Oireachtas source

I thank Deputy McGrath for his acknowledgement that the agreement concluded will ease the burden of repayment on the Irish taxpayer. On the broader issues which he raised - there may be confusion about where this fits with the decision taken in June to separate bank and sovereign debt and the progress on banking union - the Government has always said there were two elements to the bank debt issue, the first of which is the promissory note, which is the €3.1 billion required to be paid every year for ten years to what was in effect a dead bank. This issue has been dealt with in the agreement concluded with the ECB. The second element is the recapitalisation of the pillar banks, which issue will be addressed in the context of the establishment of banking union. The Deputy will be aware that the single supervisory mechanism must be in place by 2014. Other issues, including definitions of legacy debt and so on, are currently under discussion.

On the specific questions asked, the Irish Central Bank will sell the bonds only where such sale is not disruptive to financial stability. There is a schedule of sales, which if the sale conditions are right, will amount to €500 million up to end 2014, €500 million in the next four years, €1 billion in the following five years and €2 billion per annum thereafter. As I stated, such sales will be only in circumstances where they are not disruptive to financial stability. The interest rate will be a floating interest rate. We expect it to be between 3% and 3.5%.

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