Pearse Doherty (Donegal South West, Sinn Fein)
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Question 2: To ask the Minister for Finance the position regarding the work of the Troika technical group dealing with the Anglo Irish Bank promissory note; if he will provide an update on his discussions with the ECB and EU partners on this matter; and his views on what would be a successful outcome on the matter of the promissory note. [10284/12]

Brian Hayes (Dublin South West, Fine Gael)
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As the Deputy is aware I have indicated that I am committed to reviewing the approach to the promissory notes with a view to reducing the overall cost to the State of correcting the banking system. The troika have agreed to engage in a process with Irish officials to produce a common paper which will consider options for re-engineering the notes in terms of the maturity of the notes, the interest rate, the cash flows and so on. Work is ongoing on this review.

The Deputy will appreciate that there are a number of parties involved in this process and it involves all the member states of the European Union and particularly the members of the eurozone. The Deputy will also appreciate that the situation in the eurozone remains unsettled and is changing on a daily basis. In these circumstances it would not be appropriate for me to comment in any detail about various options under consideration in advance of the conclusion of the considerations and the production of a common paper. Suffice to say that a broad range of options are under detailed consideration. Additional detail on the various proposals will be available when the ongoing work is further advanced.

In tandem with this technical review the Government has commenced a campaign at a political level to garner support for an approach which is more beneficial to the Irish State. The Minister for Finance and I met the Commissioner Mr. Rehn and Mr. Mario Draghi, president of the European Central Bank, as well as a number of counterparts from member states, to make progress on this matter. The Taoiseach has also met and discussed this issue with a number of European Council members. Unfortunately, I am not in a position to indicate when the review of options and negotiations will be completed. The Government is aware that payment of the promissory note is due at the end of March 2012. However, given the nature of advocacy and the decision-making process in the EU, I would not expect this matter to be concluded in the short term.

The Government is committed to achieving an outcome that not only serves Ireland's best interests but that is in the best interests of our external partners. It is of the view that the global and European economies and the financial markets will benefit from a speedy return to growth in the Irish economy.

Pearse Doherty (Donegal South West, Sinn Fein)
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I thank the Minister of State for his response. I am sure he is well aware that last week three expert economists - Professor Karl Whelan, Professor Brian Lucey, and Dr. Stephen Kinsella - appeared before the Joint Committee on Finance, Public Expenditure and Reform and made presentations on the promissory note issue. It would be fair to say that all three of them stated that what really needs to be dealt with is the capital of €31 billion. There was concern that the Government is focusing on either extending the maturities or obtaining a reduction in the interest rate, which, as Professor Whelan said in his presentation, is irrelevant in the long run because it will go back to the Central Bank and then it will go back to the State.

I heard what the Minister of State said about considering maturities, interest rates and so on. Is the capital part of that? I am not looking for any State secrets to be given away, but is the Irish State, as part of these discussions, seeking a write-down on the capital that is to be injected into Anglo Irish Bank? I know the Minister of State cannot say when the paper will be produced, but does he expect that it will not be produced before the payment on 31 March?

Brian Hayes (Dublin South West, Fine Gael)
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I thank the Deputy for that. On the latter issue, we have not set any specific timeframes. Something we wanted to see happen for quite some time was a joint approach by the ECB, the IMF and the European Commission. They are working on the paper, and the Minister for Finance has made it clear that when it is produced, the issue will be brought to the political arena. Given the difficulties we have all had to cope with at a European level, and now that the Greek issue has hopefully been resolved in the medium term, this and other issues will now come on the agenda and progress can be made. We do not have any specific timeframes, which is important.

On the issue of the capital and the interest, while we are considering all options, I do not think there is any indication in anything the Minister for Finance has said that we are looking for a significant write-down on the totality of the debt. What the Minister has said is that the key issue for the Government is to redesign the promissory note, either in terms of maturity or of the interest rate itself, because this has effectively become a sovereign debt by virtue of the fact that the bank was nationalised and the assets and liabilities guaranteed. We want to ensure the best possible outcome but, as we have said in the past, that will be achieved by agreement. We will not take some radical unilateral position on this.

Pearse Doherty (Donegal South West, Sinn Fein)
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It is disappointing to hear a Government member say again that the focus is on the interest rate and the maturity, because this will result, in the long term, in the same amount of money being transferred to Anglo Irish Bank from the State. I am sure the Minister is well aware of the papers that Professor Whelan, in particular, presented at the Joint Committee on Finance, Public Expenditure and Reform. Does he accept that a reduction in the interest rate on the promissory note - that is, the interest rate we are paying to Anglo Irish Bank - is irrelevant in the long term, although it is relevant in the short term in terms of our Government debt levels and our general Government deficit?

Brian Hayes (Dublin South West, Fine Gael)
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The whole payment is relevant to Ireland because, by making these payments, we are making our situation more difficult. However, the point we have stressed is that we are not seeking a specific write-down. We think this can be managed in a more productive way if we redesign the entire mechanism. Our approach before the election, during the election and on coming into office has been to renegotiate all these matters, making sure we do not take an action that jeopardises our position. Our approach last year to saving €10 billion on the interest rate on the bailout money over the course of the loans made a significant financial difference to the State. That was brought about by agreement and negotiation, and that is the same approach we are taking here. I accept that the approach taken by the previous Administration in putting this financial mechanism in place was difficult and it will make our position more difficult in terms of long-term sustainability, but the bigger issue is the need to obtain external funds for investment here and to buy Irish debt when we ultimately return to the markets. I do not think we can achieve that by saying we will impose a massive write-down on the debt. It would not engender confidence.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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Question 3: To ask the Minister for Finance in view of the opinion given to the Oireachtas Joint Committee on Finance, Public Expenditure and Reform in relation to the scheduled payment of €3.1 billion to Anglo Irish Bank, now IBRC, on 31 March 2012 (details supplied) if he will immediately inform the Central Bank of Ireland, the Troika and the European Central Bank that the scheduled payment will not be made. [10181/12]

Brian Hayes (Dublin South West, Fine Gael)
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This touches on the questions raised by Deputy Doherty. I very much welcome the constructive contribution from the economists on the question of the promissory notes, and I assure the Deputy that the presentations and remarks to the joint committee will be examined in detail. However, it would not at all be appropriate for me to unilaterally instruct the Central Bank and the troika that the scheduled payment will not be made at a time when we are engaged in a process to review options for a reduction in the overall burden to the State of restructuring our banking sector by varying the cost or timing, or both, of the repayment of that debt.

The Deputy will be aware that the Government made a commitment, along with all 27 member states, at the euro summit in October last year. For the information of the House I will put that commitment on the record:

As far as our general approach to private sector involvement in the euro area is concerned, we reiterate our decision taken on 21 July 2011 that Greece requires an exceptional and unique solution.

All other euro area Member States solemnly reaffirm their inflexible determination to honour fully their own individual sovereign signature and all their commitments to sustainable fiscal conditions and structural reforms. The euro area Heads of State or Government fully support this determination as the credibility of all their sovereign signatures is a decisive element for ensuring financial stability in the euro area as a whole.

The Irish Government will honour this commitment and will ensure that we work with our EU partners to address the overall cost to the State of resolving the difficulties in our banking sector, including the promissory notes.

Additional information not given on the floor of the House

Further, I am not convinced that in the event that it may be deemed advisable to make the promissory note payment due under the current schedule in March, it will weaken our position in the ongoing review. It is simply not my experience or that of the Government that this is how things work within the European Union or the eurozone. I remind the Deputy that our external partners are engaging in these discussions notwithstanding the fact that a payment of €3.06 billion was already made in March 2011.

While it would certainly be beneficial to have the matter of the promissory note payments resolved and agreed by the end of March, there is no guarantee that this will be achieved in that time frame. The Deputy will appreciate that there are a number of parties involved directly and indirectly in the process. He will also appreciate that the situation in the eurozone remains unsettled and is changing on a daily basis. In this environment, and given the nature of advocacy and the decision-making process in the EU, I do not expect this matter to be concluded quickly. However, I assure the Deputy that everything that can be done will be done to ensure a positive outcome for the State.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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The payment of this promissory note is a major millstone around the necks of the Irish people and a major contributor towards austerity, affecting everybody across the board but particularly low-income and middle-income families. Professor Brian Lucey told the Joint Committee on Finance, Public Expenditure and Reform last week: "[O]nce we start paying under the present schedule it will be next to impossible to renegotiate that schedule or to get out from under it." Is it not true that we have a short window of opportunity between now and 31 March to address this issue on the basis of what Professor Lucey has said? If it is not addressed and solved before 31 March we will be forced into this situation for the long term and the austerity we have now will continue almost forever. The effect is that these promissory notes will cost us at least €47 billion, although other estimates go as far as €74 billion or even €85 billion. Is there not now a narrow window of opportunity to deal with this matter? If we do not deal with it before 31 March, will we not be in serious difficulty?

Brian Hayes (Dublin South West, Fine Gael)
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I am sure the Deputy is aware that we paid it last year, admittedly without the interest component, and the world did not change. While we are conscious of the difficulties this imposes on the State, the €3.1 billion was paid last year. People need to be aware of that fact.

We have taken an incremental approach to the negotiations with our external funders. Last year we managed to renegotiate the deal in the case of the minimum wage, the total cost of the bailout money, whether new loans should be sent to the National Asset Management Agency, NAMA, and, as was seen today, whether we could use the proceeds from the sale of State assets for the purposes of investment and job creation in the economy. It is the considered view of the Government that this incremental, step-by-step approach to solving our problems is far more useful than an approach based on shouting, roaring and screaming at the top of one's voice to try to impose things on others. This is an outstanding issue-----

Tommy Broughan (Dublin North East, Labour)
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The Greeks have done quite well with it.

Brian Hayes (Dublin South West, Fine Gael)
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I would not like to be in the position in which the Greeks find themselves right now.

Tommy Broughan (Dublin North East, Labour)
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Their private debt is lower than ours.

Michael Kitt (Galway East, Fianna Fail)
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The Minister of State to continue, without interruption.

Brian Hayes (Dublin South West, Fine Gael)
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To answer Deputy Healy, this is an important issue for the Government and we are prioritising it. We have made some advances in how it will progress between now and the full schedule. Just because the Government is not talking about it daily does not mean it is not devoting all its efforts to getting the point across.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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This is not a question of roaring, shouting or screaming. It is a practical and seriously difficult problem for the country, particularly for low and middle income families. Economic advisers have clearly said that if we continue to pay under this schedule, it will be impossible to renegotiate. I worry, too, about the reference to interest rates. As Deputy Doherty said, the economists have also indicated that dealing with the interest rate is effectively irrelevant in the long term. We must deal with the capital repayment and deal with it now. Surely it is time for us to stand up for ourselves and state we cannot and will not pay.

Brian Hayes (Dublin South West, Fine Gael)
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The Deputy might have the luxury of saying we cannot and will not pay, but he should be aware of the consequences. The country is being held together with emergency funding from the ECB. The cost of running the country which presents a real difficulty given the current deficit is also borne by the external support of these agencies.

I agree with the Deputy that the issue remains unresolved, but we are working hard to find a solution. We have seen the resolution of the Greek problem in the past 48 hours following the eurozone meeting. This might well give us the space and time to prioritise the issue and ensure our partners understand its significance. The Deputy should understand the troika has moved position in more recent times. It would be useful if it produced a joint position paper on the issue which would, at least, allow us to know the common position of the troika in whatever negotiations that would follow. However, I share the Deputy's frustration and anxiety to have something done about this. We are working on the issue.