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

I thank the Deputy for his question. As I have stated previously, I see no benefit in making an application for retrospective use of the ESM's direct recapitalisation instrument, DRI. During the period between June 2012, when the agreement was reached regarding retrospective recapitalisation, and December 2014, when the DRI tool became operational, the Irish economy recovered significantly and the options available to the State to recover its money invested in the banks expanded. This remains the case, with investors now willing to support Irish banks, the institutions having begun to repay capital to the State and the market value of our investments having improved accordingly.

The terms and conditions attaching to the use of the DRI are onerous, as it is designed to be used almost as a last resort after the creditor waterfall has been applied and other options have been exhausted. Moreover, the mechanics behind a potential retrospective application of the instrument, if such a decision could be agreed, would likely be equally if not more onerous and would not be in the best interests of the State at this time.

As the Deputy will be aware, the operational framework of the DRI includes stringent conditionality and any application would need to be unanimous among the other 18 ESM governors. Achieving such an outcome for a deal that valued our investments at a level significantly above what we might achieve in the market is unlikely, particularly given the strength of our economic recovery since 2012 and the other concessions won by Ireland in recent years.

The disposal of our bank assets is a process that will likely take place over a number of years and the best avenue to do this is through the financial markets. I have said before that my interest is in recovering the maximum amount of money for the Irish taxpayer from these assets over time but current market conditions are not conducive to achieving this objective. Fortunately, given that our public finances are once again on the right path, we are not under pressure to dispose of these assets in the short term.

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