Michael McGrath (Cork South Central, Fianna Fail)
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I thank the Ceann Comhairle's office for selecting for discussion what we can all agree is an important issue. We welcome the news that emerged from Brussels overnight regarding the possible extension of the term of the maturity of the loans drawn down under the European Financial Stability Facility, EFSF, as well as today's news from ECOFIN to the effect that the same extension would be considered in respect of European Financial Stabilisation Mechanism, EFSM, funding under Ireland's bailout agreement.

While I look forward to the Minister of State setting out the Department of Finance's position, the news raises the question of why an extension has not been provided to date. In July 2011, the Heads of Government and Heads of State agreed in a communiqué to extend the maturity of EFSF money for Greece to up to 30 years and to apply the same maturity provision to Portugal and Ireland. Since then, I have asked the Minister for Finance by way of parliamentary questions in the Chamber about why the provision has not been extended to us.

In February 2012, the Minister, Deputy Noonan, confirmed that, following on from the July 2011 communiqué, the Council of Ministers approved in October 2011 a European Commission proposal to increase the maturity of individual tranches of lending to Ireland and Portugal from a minimum of 15 years to up to 30 years. Clearly, this proposal has existed for quite some time. The July 2011 communiqué was quite categoric that the extension would apply to Ireland, yet we are being told in January 2013 that the Eurogroup and ECOFIN have asked that the extension of maturities be examined. In some respects, we are not making progress. We have gone from the extension being a certainty to something that requires examination.

I hope the Minister of State will set out the benefits, as the Government sees them, of extending the maturity of the various loans drawn down under the EFSF and the EFSM. The people at home will want to know whether an extension will make a difference to the types of budget we will see in the coming years. For example, will it result in a significant reduction in the country's level of interest payments and will it make our overall debt position more sustainable?

It should be pointed out that Ireland has been drawing down some funding under both of these streams for a long time. For example, we have drawn money from the EFSM over a 30-year period and money from the EFSF for 25 and 29-year periods.

We are beginning to do it. I would welcome it if the Minister of State set out on behalf of the Department what he regarded as being the benefits to Ireland of the extension of the maturity. The potential benefits are significant. We all want Ireland to return to the international bond markets as quickly as possible.

I would also like the Minister of State to deal with the issue of the concessions extended to Greece in November that have not yet been extended to Ireland. For example, Greece negotiated a deferral of interest payments on EFSF loans for a period of up to ten years. Such a deferral would bring immediate cash benefits to Ireland were it extended to us.

Alex White (Dublin South, Labour)
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I thank the Deputy for raising this issue and for his words of welcome. I welcome his welcome, if I might put it that way, for these important developments.

The meeting of the Eurogroup - the eurozone finance Ministers - yesterday had a broad agenda covering a number of issues, all of which related to the health of the euro and were important to Ireland. However, for the purpose of this discussion, I will refer to the outcome of the discussions on the extension of maturities on EU loans for Ireland and Portugal as well as the discussions on the European Stability Mechanism, ESM, direct banking recapitalisation facility.

The Eurogroup has agreed to examine the extension of the maturities on Ireland and Portugal's loans from the EFSF, the euro area facility. Last night, the Minister for Finance noted that this "is a very welcome and positive development" and that it "recognises the efforts being made by well performing programme countries". The Minister for Finance also clarified:

The Eurogroup agreed to refer this issue to senior officials to examine the technical details and they will report back shortly. This has the potential to further enhance Ireland's debt sustainability and to facilitate our successful full return to the markets.

I also remind the House that the ECOFIN meeting of all EU 27 finance Ministers has agreed to a similar request in respect of loans from the European financial stabilisation mechanism, EFSM - the EU 27 mechanism. Deputy McGrath has acknowledged that. These are important and potentially significant decisions. An extension of the maturities will be beneficial for this country as it will increase the amount of our debt with longer maturity. It has the potential to further enhance Ireland's debt sustainability and to improve our prospects of making a full return to the markets at competitive interest rates. That will mean private sector investors should be more willing to lend to Ireland, which should reduce the cost of our borrowing.

I should emphasise that this decision is only made possible by our consistent, strong track record of delivering on our programme commitments. It also reflects our considerable efforts in building support behind the scenes with our EU partners. The examination of the proposal will now be conducted by the European Commission and senior European officials, including Irish and Portuguese officials, to assess what loans will be eligible and the revised maturity dates. The advice of the NTMA will be a key element in our approach to this examination. The examination by senior officials should start immediately so that they will be in a position to report as soon as possible. The decisions taken last night and today serve as yet another example of the progress the Government is making at European level in reducing the cost of the EU-IMF programme entered into by the previous Administration. Coupled with the agreement secured in 2011 to reduce the interest rate on our loans, an agreement that saved the Irish taxpayer €9 billion in interest costs, we are making real progress in reducing the burden of the programme and positioning Ireland to make a full and sustained return to the markets at competitive rates.

The amount of funding potentially covered by these decisions is €22.5 billion for the EFSM and €17.7 billion for the EFSF. In the case of the ESM direct banking recapitalisation proposal, the Ministers received a report on the progress being made in the technical discussions. While further work remains to be done in this area, the Minister for Finance has stated that he is happy with progress to date. Our discussions on reducing the cost support to the banks, including the ESM direct recapitalisation, will continue and will deliver tangible results also.

Michael McGrath (Cork South Central, Fianna Fail)
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I thank the Minister of State for his response. I urge the Government to use the EU Presidency to ensure this happens and that we will not have a repeat of this being stated, as happened 18 months ago, but never being delivered. Since the time it was agreed that we could draw down money over a 30-year period we have drawn down money for as short a period as three years. It is clear that implementation is key. I call on the Government to ensure this happens as quickly as possible, and also to ensure we follow through on the thrust of the June summit in 2012 , which was that the vicious circle between the banks and the sovereigns would be ended. I want to see that done for the promissory note and the potential use of the ESM to relieve some of the burden of the investment in the banks by the State. I urge the Government to ensure we examine the arrangement in its totality and that there is an overall package that makes our debt position more sustainable which will help the country ultimately to exit the programme, get back on the markets and help to develop a more prosperous economy.

Alex White (Dublin South, Labour)
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I again thank the Deputy and assure him and the House that these issues have been a constant preoccupation of the Government and of the Minister for Finance, in particular, throughout the Government’s tenure in office. That continues to be the case and every opportunity has been and will continue to be taken to advance the country’s position, as is desired by all of us, to ensure resolution of all of those questions.

It is important to clarify that the decision on the extension of our maturities, which the Deputy has raised, is separate from the continuing discussions on the broader question of our banking debt, to which he also referred. On that point, I reassure the House that we will continue to pursue the banking cost issues vigorously. The discussions are continuing and we will deliver a positive outcome on it also.

The question of seeking a number of the other measures provided to Greece was also raised by Deputy McGrath in his initial contribution. The House will discuss measures to assist Greece later this evening. It is on the Order Paper for the discussion to take place soon. However, it is sufficient to say that this country’s situation is very different from that of Greece. Nevertheless, it remains the case that we will continue to examine carefully any measures provided to other programme countries for any potential benefit they might have for this country. The agreement on extended maturities by the Eurogroup and ECOFIN is one result of this consideration.