Dinny McGinley (Donegal South West, Fine Gael)
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Question 27: To ask the Minister for Finance the discussions he has had with EUROSTAT on the accounting treatment of the recapitalisation costs of Anglo Irish Bank and Irish Nationwide Building Society in 2010 and the estimated general Government deficit for 2010 in both absolute terms an as a percent of GDP; if these recapitalisation costs are counted as Government expenditure; and if he will make a statement on the matter. [33920/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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In April of this year following consultations with the Irish authorities, Eurostat published an estimated General Government Deficit for 2010 of €18.5 billion. At that stage the significant capital supports needed for the banks were not included as work was ongoing in that regard.

Earlier today, I announced the final figures for the banks and I indicated that as a result of the supports needed, there would be a very substantial spike in our General Government Deficit for this year. On a purely headline basis our General Government Deficit for 2010 will be around €50 billion or 32% of GDP this year. Were it not for the once off spike we would have broadly met our budget deficit target, with an underlying deficit of about €183⁄4 billion or 11.9% of GDP.

My officials are finalising the Maastricht Returns which are due to be submitted to Eurostat today, September 30th. The final figures will be published by Eurostat on October 22nd, as is usual.

In terms of the headline deficit it is important to note that the effects of the supports to the banks on the General Government Balance is once-off and does not impact on the deficit in subsequent years. No additional borrowing arises this year as a result of this capital support to our banks. Our ongoing cash funding requirements for these measures will be spread over more than ten years. Funding the banks in such a manner lessens the immediate impact on the Exchequer. It is important to note that the Exchequer is fully funded through to the middle of next year.

As said earlier, the underlying forecast deficit for 2010 is broadly on target at 11.9% of GDP. The slight difference between the latest forecast deficit and the figure published in April is due largely to technical factors, and the Government remains committed to achieving a General Government Deficit of below 3% of GDP by end 2014 as previously agreed.