Fergus O'Dowd (Louth, Fine Gael)

This has been an important debate. Whatever our political views, we are all here for the good of the country and everybody acknowledges that. I thank the Seanad for facilitating the taking of this legislation in one day. It is a unique and special circumstance, exceptional in every respect, and I acknowledge the commitment of all parties here to ensure we complete it. I will try to reply on all of the issues that were raised, and if any issues remain outstanding when I have finished, I am sure the Department and the Minister for Finance will be happy to respond on them.

Senator Byrne commented on how long it has taken for this Bill to come before the House. The Heads of State or Government agreed to change the European financial stability framework, EFSF, on 21 July and following this officials were engaged in the working out of the technical details. As soon as these technical issues were finalised, the Minister for Finance brought the Bill to Government and received permission to publish it in early September.

Senator Byrne also raised a number of other queries. As outlined by the Minister for Finance, Deputy Noonan, yesterday in the Dáil, there are specific Exchequer primary balance targets that Ireland is required to meet under the terms of the programme of financial support. These are set out in a technical memorandum of understanding which is part of the programme documents. As they are primary balance targets, they exclude Exchequer debt interest payments. They also follow from the exclusion of expenditure related to the banking sector recapitalisations and adjust for over or under performance in Exchequer tax revenues and PRSI receipts. We have adhered to the first three of those targets, which were set for end-December 2010, end of March and end of July 2011. The next target is set for the end of September 2011. In December 2010, the ECOFIN Council, in a revised excessive deficit procedure recommendation, decided that Ireland's general Government deficit must not exceed 8.6% of GDP in 2012. The recently announced interest rate reductions will be certainly of benefit in helping us to achieve this target.

There are other pluses and minuses, however, that we must take into account in formulating a view on the likely deficit for next year and the level of adjustment that will be required to ensure we adhere to the deficit target. The Minister, Deputy Noonan, will set out revised economic and fiscal forecasts in next month's pre-budget outlook. These forecasts will take account of the most up-to-date information available, including Quarter 2 national accounts data from the Central Statistics Office and the end of September Exchequer returns. As Members know, the Government is committed to reducing the general Government deficit to below 3% of GDP by 2015. The Minister for Finance will bring forward the budget in December.

Reference was made to the interest rate and the issue of savings. I understand from the NTMA that there will be a relatively small benefit this year from the recently confirmed interest rate reductions. A coupon payment is due on the first European financial stabilisation mechanism drawdown towards the end of this year. On the basis that the full margin cut is applied to this loan for the full life of the loan, the cash savings will be in the order of €130 million.

With regard to the position of other member states, the amendments to the European Financial Stability Facility must be approved by all 17 euro area member states. A number of states have confirmed that they have already approved these amendments and all countries have committed to passing these amendments by mid-October. Ireland, Portugal and Greece cannot benefit from the reduced interest rate and increased flexibility until the revised EFSF is implemented. This is one of the main reasons the ratification of the EFSF and the revised Greek loan facility agreement are now an urgent priority.

Events in the European Union are moving rapidly. I am well aware, as is the Government, that we need to continue to look at the bigger picture. I believe our contribution to this debate has been influential, despite our current difficult circumstances. I commend the Bill to the House.