Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I am pleased to give my initial view and the view of the Minister for Finance, Deputy Michael Noonan, on the consequences of the recent elections in Greece and thank the Senator for providing me with the opportunity to do so. While he has acknowledged that it is only 48 hours since the elections and that the new Government was only formed yesterday afternoon, it is timely and important that we begin this discussion in the House today.

Syriza clearly won the elections and has formed a coalition with the Independent Greeks. The ruling coalition will have a combined total of 162 seats in the 300 seat Parliament. The Irish Government wishes the new ruling coalition in Greece the very best in the challenges that it will face. I speak for all in the Government when I say I am particularly encouraged that the new Greek Government has committed to continued membership of the single currency. That is welcome and I am sure Senators on all sides of the House also welcome it.

Now that the elections are over and a new government has been formed, we will wait to see what proposals are brought forward, specifically relating to the high level of public debt in Greece. The Minister, Deputy Michael Noonan, attended the eurogroup yesterday, which was also attended by the outgoing Greek Finance Minister. It is important to stress that this was the normal scheduled monthly meeting of the euro area Finance Ministers. Furthermore, the Minister, Deputy Michael Noonan, highlighted that the eurogroup was the appropriate forum for discussions with Greece and other programme countries. On the Senator's comments about having a full and frank discussion, this takes place at the Eurogroup. I represented the Minister at the eurogroup in December and there are full and frank exchanges, with discussions specifically on the challenges facing programme countries and debt levels. The most likely scenario is that discussions will take place at the next scheduled Eurogroup meeting in February. In that regard, the president of the eurogroup has stated the eurogroup is ready to work with the new Government in Greece.

I am sure the new Greek Government will prioritise its discussion with the European Union in the coming days and weeks. The current Greek programme of financial assistance was due to expire at the end of last year but was extended by two months until the end of February to allow conclusion of the fifth review by the troika. Subsequently, the fifth review was halted by the presidential and ensuing general elections. There is a great deal of work to be done between now and the end of next month, which is a crucial timeframe.

Key to the discussions on the Greek programme will be the issue of debt sustainability. The vast majority of the Greek debt is official debt and is owed to European taxpayers and the IMF. Indeed, before entering a programme, the Irish taxpayer provided almost €350 million to Greece by way of bilateral loans.

There is nothing on the table yet in terms of proposals and it is up to the Greek Government to make formal proposals. Prior to any formal proposals from the Greek Government it would not be appropriate for me to speculate on the position of the Irish Government on the matter. However, I reiterate the comments of the Minister for Finance, Deputy Michael Noonan, last night to the effect that Ireland will work constructively at Eurogroup level to find solutions that are in the best interests of all our citizens.

Reference was made to the consequences for Ireland. It is worth reiterating that Ireland is in a decidedly different position to Greece. This is not to make the flippant "Ireland is not Greece" comment. I take the point Senator Bradford made about European solidarity, the importance of the Greek nation and its contribution to civilisation and democracy over hundreds of years. Nevertheless, we are in a very different economic position and this is the point that I and my colleagues have tried to make.

As a small open trading economy we have managed to emerge from the economic and fiscal crisis. The economy is now growing and, most important, jobs are being created. We have successfully exited the EU-IMF programme. In the most recent budget we were in a position for the first time to invest further in public services and to reduce the tax burden on individuals. The people have made major sacrifices to achieve this economic and financial stability and that should not be taken for granted. I assure the House that the Government will continue to act prudently and in the best interests of Ireland at all times. We will continue to use the available resources to invest in jobs and public services.

Moreover, we are in a very different position when it comes to debt. Ireland's debt levels are sustainable. We can now borrow at record low levels. This stability is opening up opportunities to achieve further savings. As Senators will recall, before Christmas we replaced €9 billion of IMF debt with cheaper market debt. The intention is to similarly re-finance a further €9 billion in the first half of this year. These early repayment transactions will deliver a saving of over €1.5 billion over the lifetime of the loans. The IMF re-financing builds on the progress made in our negotiations on debt in recent years. We also restructured the promissory note, reducing the State's borrowing requirement by €20 billion in the coming decade or so. We have succeeded in gaining concessions from our European partners in the form of maturity extensions and lower interest rates. The maturity extension removes a market re-financing requirement of €20 billion from the period 2015-22 while the interest rate reduction delivers savings each year in the annual budget. Furthermore, our net debt at the end of last year was a little over 90% of GDP. This does not take account of the value of the banking assets.

While financial markets in Greece have been adversely affected through declines in the stock markets, capital outflows and increases in bond yields, markets appear to be treating Greece as an outlier rather than a source of contagion. This is encouraging and suggests that the institutional reforms of the euro area are now having the desired impact. I thank Senator Bradford for giving me the opportunity to outline my view and the view of the Minister for Finance, Deputy Noonan, at this initial stage in response to the Greek election.