Michael McGrath (Cork South Central, Fianna Fail)
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Question 28: To ask the Minister for Finance if he will provide details of the elements in the EU-IMF programme with Ireland that he intends to put on the agenda for renegotiation as part of the forthcoming quarterly review by the troika, EU-ECB-IMF; and his objectives in this regard. [18891/11]

Michael Noonan (Limerick City, Fine Gael)
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Quarterly reviews, such as the one which will start later this week, are a standard feature of financial support programmes. The purpose of these reviews is to assess the progress of the programme to date and, in particular, to determine if the targets for the relevant quarter have been met. It will also consider progress on targets which are due in subsequent quarters to ensure sufficient progress is being made.

The review process includes a mission by the EU, ECB and IMF staff to Ireland and the preparation of reports on their findings. The disbursement of further funds is conditional on positive assessments of compliance and approval by the Eurogroup, the ECOFIN Council and the IMF executive board, as appropriate.

The Government has repeatedly stated its commitment to the programme targets. Meeting these conditions on time and on target is the best way to ensure that we emerge successfully from this programme. That will mean that we can return safely to the financial markets for funding in as timely a manner as possible. This is one of the principal objectives of the programme. The Government's commitment to the programme does not stop us from seeking and agreeing changes to aspects of the programme. We have already done this successfully. The Government will continue to do so at the appropriate time.

For the forthcoming review, the primary focus will be on our performance against the targets due by the end of the second quarter of 2011 and assessing progress on targets due in subsequent quarters. I have already signalled that, notwithstanding the substantial consolidation already carried out, in particular the amount being delivered by the Government this year, difficult decisions in relation to future consolidations remain.

There is no doubt that budget 2012 will be another difficult budget that will require an adjustment of a minimum of the €3.6 billion already indicated. Final decisions in relation to budget 2012 will be made by the Government in due course in light of the latest relevant information available at that time.

Michael McGrath (Cork South Central, Fianna Fail)
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I thank the Minister for his response. The purpose of the question was to establish whether there are particular items that the Minister has placed on the agenda for this week's visit by the troika. Does he wish to renegotiate issues in the current deal? The Minister has gone on record previously as saying he believes this to be a bad deal for Ireland. The issues that were changed during the first and second quarterly reviews were quite modest, to say the least, and certainly did not reduce the cost of the deal. The agreement to introduce a jobs initiative, the reversal of the minimum wage, an agreement to undertake a comprehensive spending review, and the decision not to transfer any further loans to NAMA are really changes around the edges of the deal. There is nothing there that reduces the cost or burden to the State as regards the EU-IMF deal.

There is an opportunity this week and if the Minister still believes it is a bad deal, what elements of it is he still seeking to renegotiate and change? It would be helpful to have some clarity on these issues. The Minister might consider providing us with an update on the interest rate reduction and whether he expects any movement on it before the autumn.

Michael Noonan (Limerick City, Fine Gael)
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The Deputy has outlined the successful renegotiation of the deal we achieved when we met the troika a number of weeks ago. We agreed major changes, including the provision of scope for the jobs initiative which the Deputy recently described in extravagant terms in the House, a commitment to an expenditure review and, more important, to a review from 2012 to 2015. While the programme negotiated by the Deputy's party in government was to run straight through to 2014, there is now a commitment to a review following the first two budgets, which is significant.

On the review due to take place next week, we have not signalled any major items for renegotiation. However, during the quarter in the run-up to the budget there will be items for renegotiation because the manner in which we will make the correction in the budget may not accord with what is in the memorandum of understanding. As long as our approach is fiscally neutral, we will be in a position to substitute one measure for another.

Michael McGrath (Cork South Central, Fianna Fail)
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Everyone accepts that there is no difficulty in making changes which are fiscally neutral. The troika will not have a difficulty with this. However, the Minister is on record since November last as saying this is a bad deal for Ireland. The question now is how does he intend to improve what he regards as a bad deal for Ireland. The changes made which I have summarised do not reduce in any way the cost of the deal to the State. The Minister said he would be in a position to negotiate these changes, yet he has not done so or taken the opportunity on the floor of the House today to indicate the issues on which he intends this week to seek renegotiation. Perhaps he might also take the opportunity today to advise the House whether an interest rate reduction will remain a live issue during the summer months or if we are unlikely to see any movement this side of the autumn.

Michael Noonan (Limerick City, Fine Gael)
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An interest rate reduction is the subject matter of subsequent questions and I do want to take the ground from other Deputies by answering supplementary questions on the matter from Deputy McGrath. My response to it will come in due course.

The changes made in the review were substantial. On criticising the programme, I have always said the greatest problem in that regard was the manner in which the outgoing Government had turned bank debt into sovereign debt. In that context, the major change we have made which has huge cost consequences involves a restructuring of the banks which I announced at the end of March or early in April.

Michael McGrath (Cork South Central, Fianna Fail)
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That was in the original deal.