Seán Fleming (Laois-Offaly, Fianna Fail)
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To ask the Minister for Finance if a technical paper has been agreed with the Troika in respect of the options for restructuring the Irish Bank Resolution Corporation promissory note; if he intends to publish such a paper; the potential benefit to the State from the options under consideration; the timeline he envisages for conclusion of negotiations in respect of the promissory note; and if he will make a statement on the matter. [2063/13]

Pearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance if he will provide an update on the on-going negotiations with the ECB on the promissory note; if an agreed technical paper has been concluded between the Troika and his Department and if not if he will indicate if such a paper is still being worked on; and if he will detail the terms of a deal on this debt that he considers to be acceptable. [2113/13]

Michael Noonan (Limerick City, Fine Gael)
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I propose to answer Questions Nos. 1 and 2 together.

As the Deputies are aware, the Government has been working extremely hard to secure a deal on the Irish bank debt with our European partners, and detailed work will continue to ensure that positive moves in Europe are harnessed to maximise the benefit to the Irish taxpayer. The focus of the ongoing detailed discussions has progressed to consideration of all options in regard to the promissory notes, such as the source of funding, the duration of the notes and the interest rate applicable, as well as potential avenues for the wider bank debt deal and the impact of these options on IBRC. This work is one of the Government’s key priorities and will remain a key focus during the EU Presidency.

As previously advised to the House, the terms sought by the Government are those which achieve the best possible outcome for the Irish taxpayer. It is not possible to give guidance on the timing or potential outcome of the discussions, as to do so could impede our ability to achieve the best possible results, but every effort is being made to expedite the ongoing process. I am satisfied that every available and appropriate opportunity to advance Ireland’s position with regard to legacy bank debt with our European partners is being availed of and that every effort to keep the issue of the Irish bank debt at the top of the European agenda is being made.

I have stated previously that I am working to try and achieve a solution before the next scheduled instalment on the promissory note, scheduled for March. The numerous references in Europe to Ireland’s special status in regard to discussions on these matters gives comfort and the Irish Presidency will build on this in the coming months. The recent comments of the President of the European Council, Herman Van Rompuy, following his meeting with the Taoiseach and Tánaiste in respect of his support for a positive outcome in our negotiations is to be welcomed. I have always stated that our problems are part of a wider European dilemma and any solution to address the Irish situation must be as part of an overall eurozone and global solution. The shift in European policy in terms of breaking the vicious circle between the banks and the sovereign is to be welcomed and represents a major step forward.

It would be difficult for Ireland to make a payment on the promissory notes, and so we continue to work on a deal with our European partners to resolve this issue. I am glad to say that we meet with strong appreciation of our situation and are able to have very constructive dialogue on our approach to this question, and I believe a deal is likely in advance of the March deadline.

As the Governor of the Central Bank stated yesterday to the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, there has been an intensive process of discussion and negotiation on this matter, which is one of the main thrusts of the Government’s policy in Europe. It is not easy to find a generally acceptable solution and an initiative of this type must take into account both the statutory position and wider policy stance of the ECB. We have been working carefully to build understanding and confidence around a set of proposed transactions designed to deliver for Ireland.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I am pleased that the Minister has confirmed to the House in public that this deal is likely. I honestly believe he would not have made such a statement unless he was 100% sure we would get the deal. The Taoiseach stated some days ago he was confident of it and yesterday, at the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, the Governor of the Central Bank stated that the ECB is an organisation that seeks to proceed as far as possible by consensus. It is not surprising that this work has been taking quite a while. I believe what we have designed is largely in the interest of the euro system as a whole. Professor Honohan made it clear yesterday that something has been designed. I accept there are probably some i's to be dotted and t's to be crossed. It is now clear that the deal is essentially ready and just remains to be signed off. The Minister's confirmation that the deal is likely is confirmation enough as far as I am concerned because I do not believe he would have used those words if the deal was not likely to happen.

The question now is what will be the benefits for the general Irish public this year given that the deal has been made. It has not been officially announced or signed off but essentially it is in the melting pot, to be delivered before 31 March. Has the Minister been looking at issues such as the minimal interest rates of close to 0%? When the deal is done, even though the loan may be extended over a period - I would ask for a deferral of the principal until the end of the loan - what we do not want is to have to pay more interest over a longer period than is scheduled under the current arrangement. As part of the talks, has the Minister asked for any reduction in the actual principal? He may not be able to confirm this, but I believe that if one does not ask for this one will certainly not get it. We would like to think that every effort is being made on every front in regard to this deal.

I am pleased that the deal is all but announced. The big question the people of this country want answered today is what the benefits will be for them in terms of the austerity programme and the expenditure cuts announced on the day of the budget, and whether there can be any relief on these during the course of this year.

Michael Noonan (Limerick City, Fine Gael)
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The Deputy is incorrect in assuming that a deal is certain. What I said was that it was likely. In saying that, I reiterate what I said in advance of the Eurogroup meeting in Brussels last December. I was asked if Ireland would be paying the promissory note and I replied that because a deal was likely it was unlikely that we would be paying it in full. There is no advance on that. The Deputy should not assume a deal is certain. There are still significant parts of the negotiation to be completed.

Pearse Doherty (Donegal South West, Sinn Fein)
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There has been a great deal of talk about the deal and the Minister's comments today are welcome. The Minister of State, Deputy Lucinda Creighton, and the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, probably said more than the Minister, Deputy Noonan, would have wished. The comments from the Taoiseach and those made yesterday by the Governor of the Central Bank all indicate that a deal is very likely.

Given that, the real question is what is a deal. Last year, the Minister, Deputy Noonan, announced a deal that was a five-hand trick with the IBRC, the State, NAMA, Bank of Ireland and back again to IBRC, in which the ECB got its money and we ended up worse off in terms of our budgetary position. We paid the capital but there is still liability and our debt did not decrease.

The real question the people to whom I speak want to have answered is what impact it will have on them. According to the Governor, something is being engineered by the Central Bank. It has not been signed off on, as he has not got complete agreement on it. Will the Minister provide clarity for the House and the public at home on the proposal before the ECB? Will it lead to a reduction in the debt-to-GDP ratio and the liability on taxpayers to pay back €28.1 billion to the IBRC, which is what the promissory note is worth at this point in time? Will there be a reduction in the amount of capital? Will we end up paying more or less in interest as a result this year?

When I put these questions to the Governor, it appeared that the engineering of a deal would mean that our debt would not decrease, that we would end up paying back all of the capital and that the amount in interest we would pay this year would increase rather than decrease. That was the sense I took from him and I stand to be corrected. I, therefore, seek clarification from the Minister on where the issue lies. I understand there will be benefits in the medium term in terms of profiling and also that there could be significant benefits in the budgetary position next year. However, when Fine Gael spoke about burden sharing, most believed it would be between the bankers and the bond holders; we did not think it would be between one generation and the next. It is clear that the deal being orchestrated involves passing the burden from this generation to the next, but that is not the burden sharing most people want to see.

Michael Noonan (Limerick City, Fine Gael)
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As I said, while a deal is likely, it is not certain. It has not been concluded. There are significant outstanding matters that have yet to be concluded and they are of sufficient magnitude to derail a deal. There are also some moving parts; therefore, it is not possible for me to discuss the elements of the deal until it has been finalised, which is obvious.

I accept Deputy Sean Fleming's good wishes and acknowledge his concern that we negotiate a deal because the promissory note has been a significant burden on the taxpayer. Relieving the burden of the promissory note would be welcomed by all taxpayers. I am also well aware that there are certain commentators and Deputies in the House who, regardless of whether there is adeal, will spend the next couple of weeks positioning themselves to oppose it, regardless of what is included in it, and to rubbish it, but I cannot control this.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I accept that a deal is not certain. If it was, the Minister would announce it, but I hope one is close. My party hopes the Minister will get a good deal but not at any cost. There is one issue I ask him to put into the melting pot. I do not have the figures, but perhaps the Minister does and can work on them. In recent years when Irish Government bonds were trading at a figure of about 80% against par at some stages, inevitably the European Central Bank would have purchased some of them to have a floor in the market. Some commentators have said the European Central Bank is sitting on a profit of €3 billion to €4 billion on Irish Government bonds that it bought at the time and which are now trading above par, which is a good sign. Will the Minister ask the European Central Bank in the discussions on reducing the principal figure of €28.1 billion not to make a profit on the backs of the Irish people by speculating in the bond market to make a profit of €3 billion or €4 billion? Perhaps the money could be used to reduce the principal at no loss to it.

Pearse Doherty (Donegal South West, Sinn Fein)
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This is the first Question Time in 2013. We can have all the smart aleck comments the Minister wishes for the next year, but I asked him three specific questions. I know he cannot go into detail, but is it the Government's intention that the debt-to-GDP ratio will be reduced as a result of the successful negotiation of a deal? Is it the intention that the taxpayer will be spared from paying some of the capital? Is it the intention that we will pay at lower interest rates on the portion of the capital included as part of a deal? These are three genuine questions the Minister may wish to dismiss, but I have a democratic right to ask questions. I also have a right to expect answers from him.

Michael Noonan (Limerick City, Fine Gael)
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As I said, since a deal has not been concluded and is not certain to be concluded, I cannot describe the elements of a deal that has not yet been concluded. It is idle to speculate about something that is not yet in place and may not be. I am not stalling. I am saying that while the negotiations have proceeded in a satisfactory manner, they have not been concluded and there are significant outstanding items. If a deal is concluded, I will come into the House to explain it in detail and people can see what it is in it and judge it on its merits. Until that happens, however, I am not in a position to do so. This is not an attempt not to answer questions fully or to show disrespect to Deputy Pearse Doherty or any other Deputy. The negotiations have gone well, but there are serious outstanding matters which could still prevent the conclusion of a deal. Also, there are some moving parts. Therefore, it is idle to speculate, but if I negotiate a deal, I will explain it fully in the House.