Danny Healy-Rae (Kerry, Independent)
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20. To ask the Minister for Finance if he will renegotiate the amount of debt Ireland has to repay with a view to reducing it; if he will seek an extension of the time period in which the debt must be repaid in view of the fact that it is unfair to ask this generation to shoulder the burden; and if he will make a statement on the matter. [31625/17]

Danny Healy-Rae (Kerry, Independent)
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Will the Minister renegotiate the amount of debt Ireland has to repay with a view to reducing it? Will he seek an extension of the time period in which the debt must be repaid in view of the fact that it is unfair to ask this generation to shoulder the burden? All sections of our community are suffering because of this debt.

Paschal Donohoe (Dublin Central, Fine Gael)
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I presume the Deputy is referring to EU-IMF programme-related debt when he asks about renegotiation. This debt accounts for about one quarter of Ireland’s total debt.

My Department, in conjunction with the National Treasury Management Agency, NTMA, is constantly looking to avail of any appropriate opportunity for savings on the cost of our EU-IMF programme loans and the matter is constantly reviewed. Our debt-to-national income ratio has declined significantly in recent years. However, I recognise the limitations of using GDP, gross domestic product, as a proxy for our national income. For a more meaningful assessment of trends in public debt in Ireland, it is important to look beyond this simple measure.

While other debt sustainability measures such as the debt-to-revenue ratio and the interest-to-revenue ratio are also improving, they clearly demonstrate that our debt level is high by international standards. Accordingly, reducing it must remain a priority. Our economy is growing strongly. Our public finance deficit is declining, as are our debt service costs. We are now running a primary budget surplus. All of this is positive from a debt sustainability perspective. In addition, the proceeds from the recent sale of part of the Government’s shareholding in AIB will reduce the overall level of public debt.

As regards seeking renegotiation as suggested by the Deputy, he should be aware that significant improvements to the terms of our EU-IMF programme loans that have already been secured since they were initially agreed in late 2010. There have been two separate maturity extensions granted to loans from the EFSM, European financial stabilisation mechanism, and the EFSF, European financial stability facility. These extensions mean that the next EFSF maturity is not until 2029, while it is not expected that Ireland will have to refinance any of its EFSM loans before 2027. All of this has delivered significant savings for this and future generations.

Danny Healy-Rae (Kerry, Independent)
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I thank the Minister for his reply.

Last year, Greece paid €8 billion to service debts of €350 billion, while Ireland paid €7.5 billion to service debts of €214 billion. Why did it cost us almost as much as Greece to service €100 billion less?

Middle-income earners cannot continue paying 51% or 52% tax. Services have been cut, including those for people with disabilities. Even death grants are not to be had anymore. The European Central Bank lent the money at 0.5% and then started off demanding 5% and 5.5% interest to get the money back. Irish people have paid for 42% of the European banking crisis. Average banking debt across the EU is €192 per person. In Ireland, it is €9,000 per person. The next highest country is Germany at €491 and then Latvia at €317.

Paschal Donohoe (Dublin Central, Fine Gael)
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Greece is still in a bailout programme. It is involved in reducing spending on public services and investment, as well as changing public pensions.

We have all that behind us. We have made those changes. We are out of a bailout programme and we are now in a position in which we are able to fund our own debt on a day-to-day basis. We are seeking to pay back money we secured in a bailout programme.

The Deputy asked me what changes were made to make our debt more sustainable. We made changes in regard to the interest rates in terms of how we accessed funding from the European Union and other countries. Those savings were worth over €9 billion over the original seven and a half years of the loans. We made decisions to extend the maturities or the length of time over which we would pay back debt to European institutions. This removed the need for the State to refinance nearly €20 billion worth of debt between 2015 and 2022. We made a decision to repay over four fifths of our IMF loans, which will deliver interest savings of over €1.5 billion. We are securing the kind of change the Deputy is seeking. The difference between Ireland and Greece is as I have tried to outline to him.

Danny Healy-Rae (Kerry, Independent)
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Ireland is a small country with a small population. We do not have oil wells or gold mines. It is the working people who are paying this debt. It was not the working people or the people of Ireland who caused the problem; it was the bondholders and the bankers.

I ask the Minister to tell the ECB bankers that we will pay. Irish people have always paid their way. We cannot pay until we have the money, however, and there is too much pressure on the current generation given what they are suffering at present. Germany should understand this well because it did not finish paying its First World War debt until three or four years ago. We still need to do better and the Government, including the Minister, needs to do better in this regard. The economic recovery has not gone far beyond the Red Cow.

Paschal Donohoe (Dublin Central, Fine Gael)
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It is precisely because of the scale of debt we have that the Government has made the decision, as we are gaining money back from our banking system through the sale of a quarter of AIB, for example, to put the money back into reducing our national debt. Being in a position where our national debt grows in an unsustainable way is a threat not only to future generations but also to the current one.

On the Deputy's question regarding the time over which we are paying back our debt, the proportion of our debt that is maturing for longer than five years is approximately 30%. The proportion in Belgium is 40%, the proportion in France is 50%, and that in Italy is also 50%. Therefore, we are seeking to pay back our debt over a longer period. Balancing our books is the most significant day-to-day contribution we can make to stabilise the debt and continue to reduce it.