Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context

Question 114: To ask the Minister for Finance the implications arising from the recent decision by EUROSTAT in respect of off-balance sheet accounting; and if he will make a statement on the matter. [17560/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

l presume the Deputy is referring the recent publication of the Maastricht returns which included a decision by the Irish authorities to reclassify the injection by the Government in Anglo Irish Bank in 2009 from a financial transaction to a capital transfer.

Initially the Irish authorities, having regard to Eurostat guidelines, classified this injection as a financial transaction and as such it did not affect the general government balance. Since then, the Irish authorities have reviewed the matter in light of later information and concluded that the transaction should now be considered as capital expenditure rather than a financial transaction. This was reported to Eurostat in the statistical transmission submitted last week, and was subsequently published by Eurostat as part of its notification of deficit and debt data for Member States for 2009.

The result is the deficit has been re-calculated to be 14.3% of GDP. I want to stress that there is no additional borrowing as a result of this technical reclassification. The Exchequer Balance, National Debt and General Government Debt had already accounted for this borrowing. The underlying General Government Balance excluding this reclassification is 11.8% of GDP, which is broadly in line with the Budget day estimate.

The reclassification of the €4 billion to Anglo in 2009 is a once-off adjustment that only impacts on the 2009 General Government Deficit and does not affect the Budget day forecast for a General Government Deficit of around 111⁄2 % of GDP for 2010, and in that context, Ireland's fiscal targets have not changed in light of these statistical returns.