Lucinda Creighton (Dublin South East, Fine Gael)
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Question 78: To ask the Minister for Finance the measure taken in negotiations with the European Central Bank, EU and International Monetary Fund to protect the National Pension Reserve Fund; his views regarding the use of €12.5 billion of the fund as part of the EU/ECB/IMF deal; the reason he did not prioritise a plan for growth and stimulus at any stage throughout the negotiations; and if he will make a statement on the matter. [45786/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Government announced on 28 November 2010 that it had agreed in principle to the provision of €85 billion of financial support to Ireland by Member States of the European Union through the European Financial Stability Mechanism and the European Financial Stability Facility (EFSF); bilateral loans from the UK, Sweden and Denmark; and the International Monetary Fund's (IMF) Extended Fund Facility (EFF) on the basis of specified conditions. The State's contribution to the €85 billion facility will be €171⁄2 billion, which will come from the National Pensions Reserve Fund (NPRF) and other domestic cash resources. This means that the extent of the external assistance will be reduced to €671⁄2 billion.

The purpose of the external financial support is to return our economy to sustainable growth and to ensure that we have a properly functioning, healthy banking system. We have agreed to use resources available to us to make our own contribution to the programme. The Programme for the Recovery of the Banking System will be an intensification of the measures already adopted by the Government. The programme provides for a fundamental downsizing and reorganisation of the banking sector so it is proportionate to the size of the economy. It will be capitalised to the highest international standards and in a position to return to normal market sources of funding, and it is appropriate that we should play our part in this through the National Pensions Reserve Fund. Furthermore, this State cannot ask taxpayers from other countries to contribute to a financial support package while leaving its own assets untouched.

In relation to fiscal policy and structural reform, the Programme for Support endorses the Government's budgetary adjustment plan of €15 billion over the next four years and the structural reforms contained in the National Recovery Plan which will underpin a return to sustainable economic growth over the coming years. The NPRF's commitment to infrastructure development as outlined in the National Recovery Plan is unaffected by the Fund's contribution to the financial support package.