Deirdre Clune (Cork South Central, Fine Gael)
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Question 34: To ask the Minister for Finance if the EUROSTAT classification of the recapitalisation of Anglo Irish Bank in 2009 has implications for the projected general deficit in 2010 and later years; and if the EU Commission has confirmed that the existing deficit correction over the period to 2014 is still acceptable under the Eurozone obligations. [24711/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Initially the Irish authorities, with regard to Eurostat guidelines, classified the investment of €4bn by the Government in Anglo Irish Bank in 2009 as a financial transaction and, as such, it did not affect the general government balance. However, since then the Irish authorities have reviewed the matter in light of later information and concluded that the transaction should be considered a capital injection rather than a financial transaction. In the course of making the Maastricht returns this information was relayed to Eurostat.

This resulted in the general government deficit being re-calculated to be 14.3% of GDP. The underlying General Government Balance excluding this technical reclassification is 11.8% of GDP, which is broadly in line with the Budget day estimate.

This reclassification is a once-off adjustment that only impacts on 2009 and does not affect the forecast for a General Government Balance of around 11 1⁄2 % of GDP for 2010, nor does it impact on later years.

In April of this year the EU Commission issued its opinion on Ireland's Stability Programme Update. This, along with the other Member States programmes, was considered at Ecofin. Our Programme, which sets out our plan to have a General Government deficit below 3% of GDP by 2014, was welcomed. The Ecofin Council endorsed the substantial consolidation measures which we have undertaken and called on us to rigorously implement the budget for 2010.

Therefore, the target of 2014 to reduce the general government deficit below 3% of GDP remains valid.