Enda Kenny (Mayo, Fine Gael) | Oireachtas source

On 21 February, the governing council of the European Central Bank decided to publish the euro system's holdings of securities acquired under the securities markets programme, or what is called the SMP. That decision is in line with the envisaged transparency stance for the outright monetary transactions, as was communicated on 6 September 2012. At that time, the securities markets programme was terminated. That showed total holdings on 31 December 2012, with a nominal value of €218 billion, comprising Italian, Greek, Spanish, Portuguese and Irish bonds. Of this total, Irish bonds amounted to €14.2 billion nominal value with an average remaining maturity of 4.6 years. The statement did not include any estimate of any profit which the ECB may or may not realise on such bonds. However, the ECB also raised its annual accounts on 21 February. The press release accompanying that showed that the ECB's total interest earnings on a securities market programme, and its holdings of Irish, Greek, Spanish, Italian and Portuguese bonds in 2012, was €1.1 billion. The statement confirmed that some €555 million of this interest arose from its holdings on Greek bonds, which amounted to €33.9 billion. The remaining €463 million of the ECB's SMP interest earnings arose from its combined holdings of Italian, Spanish, Portuguese and Irish bonds.

We should be cognisant of the fact that the ECB is bound by its obligations under the EU treaties and that member states must respect that. The package of measures that was agreed for Greece on 26 November 2012 by eurozone finance Ministers was designed to put the Greek economy on a path to sustainable growth and its domestic finances on a sound footing. That package was agreed in the context of the statement by the euro area Heads of State and Government that the scale of the Greek problem was so large that it required special attention.

It is important to note that the concessions that were agreed specifically for Greece were accompanied by a significant additional conditionality. One of the measures that was proposed in November - the SMP profits measure - will see member states pass on to Greece's segregated account an amount equivalent to the income on the SMP portfolio that would eventually accrue to their national central banks as from budget year 2013.

Member states under a full financial assistance programme, such as Ireland, are not required to participate in this scheme for the period in which they receive financial assistance. Ireland is obviously in a very different position from Greece. Our programme is working. We have completed 190 agreed targets and have surpassed many, including our annual deficit targets. Growth has returned to the economy and I welcomed last week's figures showing positive employment growth. Furthermore, as a country exiting a programme, our situation cannot be seen as comparable to Greece. We continue to examine the Greek package to see if any aspects of it offer any possible benefit to Ireland, particularly in regard to our exit.

In January, EU finance Ministers agreed that the request made by Portugal and Ireland for an extension of the maturities of their loans from the EFSF and the EFSM would be considered by senior officials before coming back to finance Ministers for further consideration.

Deputies will be aware that we have had some positive news recently: the elimination of the promissory notes in IBRC; the sale of the Bank of Ireland contingent convertible capital notes, known as Cocos; the recent sale of Irish Life; and, just this week, the announcement of the ending of the bank guarantee. These are significant milestones on this country's way back to recovery. Obviously, we still have important and necessary decisions to take as is evidenced by the recent agreement on public sector pay, but Ireland is continuing to restore the damage done and is returning to more normal circumstances, albeit not without risks along the way.

I would recall the benefits we have already received, notably assistance in the form of a reduction of interest rates and extended maturities. In addition, last June, the Heads of State and Government agreed on breaking the link between banks and sovereign. They made explicit reference to Ireland in that decision. It is important to remember that Ireland is exiting a programme and we should have regard to what we need to assist that exit, rather than focusing solely on measures that are provided for a country in very different circumstances than ours.

As Deputy Martin is aware, the ECOFIN group under the chairmanship of the Minister for Finance has been discussing this matter today. While the situation has been agreed in principle, clearly the troika needs to analyse the details of that. If it is agreed, it has to be put to each country. In the context of extending the maturities of the loans given to both Portugal and Ireland, this would be of further significant benefit to us as we make our way to exiting this programme. These moneys from European institutions are at lower interest rates than we could achieve on the markets, and therefore a longer extension of that would be of benefit to us. However, it is too early to make a definitive statement about it until these matters are finished.

The Deputy asked whether we have done an analysis on the impact of the potential exit of the UK from the EU, were that to be decided by the British Government and the British people. I have already said that this would be of the most serious import for this country and, indeed, in the context of the European Union. I expect to devote some of our time to this matter next week when I meet with the British Prime Minister in London. Britain is our closest neighbour and biggest trading partner, as well as being close in so many other respects. I would not like to see a situation where Britain decided to leave the European Union. As a founder member of the Single Market, this must be seen in the context of discussions that will take place under the Irish EU Presidency on trade issues with Japan, Singapore, Canada and other countries. Hopefully, we will also get a mandate to start the negotiations on EU-US trade talks once Ireland's EU Presidency is finished. If we get that mandate during our EU Presidency, the talks would commence subsequent to our EU Presidency. The figures, however, indicate the possibility of the creation of at least 2 million jobs in Europe, with the opportunity to increase economic growth in the various countries by up to 3%. I intend to discuss these issues with the British Prime Minister, Mr. Cameron.

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