Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

Most countries have national debts; I do not know of any country which does not have such a debt. If one is running a national debt, one pays interest on outstanding loans. That is the way countries behave if they wish to remain solvent. Ireland's national debt is just in excess of €200 billion, of which some €64 billion arises from the situation with the banks, while €138 billion relates to the fact that we and our predecessors in government have run deficits. That is why we are obliged to reduce our deficit. On each occasion on which we run a deficit, the national debt increases and the interest burden which the Deputy deplores also rises. If we were to implement what all those who advocate additional expenditure and no cuts in expenditure are seeking, the debt would rise again and we would be obliged to pay more interest on it. It is not possible to have it both ways.

The Deputy has stated the final point I made in my initial reply is not real. Of course, it is real. There is no longer a margin on the official debt relating to Europe, which is down to the rate which applies to borrowing. That is of huge advantage to Ireland because it reduces our interest rate.

The Deputy has also referred to the deal on the promissory notes and stated it has had no benefit. Some €30 billion was involved in that regard. The Deputy will recall that up to two years ago a bill of €3 billion in respect of the promissory notes had to be paid each March.

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