Charles Flanagan (Laois-Offaly, Fine Gael) | Oireachtas source

I welcome the content of the Government's motion and warmly congratulate the Taoiseach, Tánaiste and Minister for Finance on achieving an excellent result in Europe last week with the ripping up of the promissory note and the implementation of a new sustainable deal. Since the formation of the Government in 2011, it has been a key priority under the programme for Government to eliminate the promissory note and to put in place a new deal with the approval of the European Central Bank. We know the excesses of Anglo Irish Bank and Irish Nationwide were of a shocking scale which brought the country to the brink. The new deal, as analysts rightly state, is the best possible outcome for Ireland.

Despite criticism from some Members of the Opposition, it was the only real deal that was achievable last week. We no longer have to worry about paying €3.1 billion on 31 March every year, which would have been a huge drain on the State's cashflow. It was an embarrassment that we had to make the payment given the economic circumstances of each household in the country and the pressures they are under. The promissory notes are now destroyed and long-term Government bonds have replaced them with an average 34 to 35 year repayment period. As the Minister for Finance, Deputy Michael Noonan, has stated, it is like changing a short-term loan into a longer-term, interest-only mortgage. It is as if someone who receives a €1,000 loan today has to repay 1% interest each year while repaying the €1,000 principal in 15 instalments over a period of 15 years from 2038. There are many other benefits from the deal, including the fact that cashflow of almost €20 billion will be saved over the next ten years as less money will need to be borrowed and the deficit will be reduced by €1 billion each year over the coming years.

We know that a write-off of a portion of the debt was never on the table as write-offs are illegal under the rules of the European Central Bank, and we know that default would have meant dire consequences for every man, woman and child in the country. That is not something a responsible Government would act unilaterally to undertake. We know the bond markets have reacted positively and that yields fell to 3.9% immediately after the deal was announced. It was very much a vote of confidence from the markets. It was a vote of certainty that the country has a future. The feedback from business people has been extremely positive and extraordinary. They see that Ireland has a future and that the deal greatly improves opportunities for new businesses to locate here. It also makes it easier for the Minister for Jobs, Enterprise and Innovation and others, including the IDA and Enterprise Ireland, to sell Ireland when travelling abroad. When they walk into boardrooms, they can walk in with confidence and seek investment from America and elsewhere.

I am glad the Minister for Finance has reassured the Dáil that there will not be a fire sale of IBRC assets and that there will be an independent evaluation of all assets before they are sold. This is only the first phase in the restructuring of Ireland's banking debt. Phase 2 has already begun and involves splitting the remaining banking debt from the sovereign debt. The Government is doing everything to recoup as much as possible of the money that has gone into the banks. The Taoiseach received a very positive response and huge commitment from the European Council on 29 June 2012 which will help to break the vicious cycle between banks and the sovereign. It was ground-breaking news at the time. Ireland is participating in negotiations on the development of the European Stability Mechanism and the establishment of a European single supervisory mechanism under new policy guidelines agreed by Europe. This represents a significant opportunity for a new deal to be done on the remaining debt in the coming years.

Europe needs a success story and Ireland can be part of one. We can be the first country to emerge from an EU-IMF programme. I welcome the motion and congratulate the Taoiseach, Tánaiste, Minister for Finance, members of the diplomatic corps, the Governor of the Central Bank and all other Government members and officials who were involved in achieving a new deal for the Exchequer and taxpayers. It will help to reduce our debt servicing costs and reduce our risk profile. It greatly improves Ireland's reputation and increases our chances of re-entering the normal financial markets in the years ahead, which is very much a Government priority.

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