Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

First, extending the income subsidy scheme at the end of the 12-week period is a decision for the Dáil to make. The average cost of the income support schemes we have in place at the moment is between €300 million and €400 million per week. The future of that particular scheme is, and will be, a very significant decision, but my very strong view is that while we can fund that scheme to respond to this phase of Covid-19, it and the pandemic unemployment payment are not schemes the State can fund indefinitely. A decision will have to be made regarding how they are removed or tapered when our public health guidance allows such decisions to be made.

Regarding how we would borrow in the future, my strong preference is that the State will be in a position where we will be able to fund ourselves independently on the financial markets, as we have been able to do for the last number of years. Only this morning, the National Treasury Management Agency was successful in selling some short-term debt on behalf of our country at a negative interest rate. Other investors were willing to pay to hold Irish debt. For that reason, it is absolutely in our interest to continue to fund ourselves freely on the financial markets, as we respond to the challenge of Covid-19. We will be able to borrow more if we need to, in order to respond to the economic consequences of this disease, but we do not have an openended ability to borrow. There will come a point at which a decision will have to be made about the maximum amount of money we need, whether we can fund it and how we are able to borrow that money.

Regarding the challenges facing us as well as future decisions that the Dáil and the Government may need to make, I believe that we will be able to pay for them as long as they are sensible and affordable and do not add in an unsustainable way to our current level of debt.

The way in which issues like corona bonds will be addressed is through the recovery fund that was agreed by finance ministers of the EU last week. There was also a meeting of finance ministers this afternoon and in which I participated. Normally I would not support ideas such as debt mutualisation, but the circumstances are so exceptional that we have to be willing to look at new ways in which we can support countries that find themselves in grave difficulty because of this disease.

As to our ability to refinance, we will consider any opportunity to refinance. However, it is my expectation that the way in which we will refinance our national debt will be through our engagement with the financial markets, with the European Central Bank and its commitment to allow the continued functioning of those debt markets in the background. We will do that through engaging directly with investors as opposed to using the institutions of the EU or elsewhere.

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