Tommy Broughan (Dublin North East, Labour)
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Question 77: To ask the Minister for Finance the size of the structural deficit in national budgets between 2006 and 2011; and if he will make a statement on the matter. [8224/11]

Michael Noonan (Limerick City, Fine Gael)
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The latest published estimates of the structural deficit are presented in the table. These figures were compiled on the basis of economic and budgetary forecasts produced last autumn, and were published in graph format by my Department as an annex to the previous Government's national recovery plan.

Table 1: Structural Balance, % of GDP

Source: Department of Finance, The National Recovery Plan 2011 – 2014, Autumn 2010

I would point out to the Deputy that my Department is currently updating its economic and budgetary projections in the context of the Stability Programme Update, which will be published and submitted to the EU Commission at the end of April. Updated estimates of the structural balance will be published with this, incorporating changes in the methodology as appropriate. Estimates of the structural deficit are determined on the basis of the harmonized methodology, developed jointly by the EU Commission and the Member States, to decompose the headline deficit into its cyclical and structural components. This structural deficit, by definition, excludes all one-off measures, which in an Irish context are primarily composed of fiscal supports to the banking sector.

In practice, all estimates of the structural position are subject to considerable uncertainty, the sources of which have been outlined in previous Stability Programme Updates. Nevertheless, it is clear that a significant part of the deficit is structural in nature, and so will not be eliminated with economic recovery. Therefore, ongoing fiscal consolidation is required to adequately address the budget deficit and thereby put the public finances on a sustainable footing.

Tommy Broughan (Dublin North East, Labour)
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Question 78: To ask the Minister for Finance the amount of budget income spent on bank recapitalisation and interest payments in national budgets between 2008 and 2011; and if he will make a statement on the matter. [8225/11]

Michael Noonan (Limerick City, Fine Gael)
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In relation to State support for the banking sector, in 2009 the Exchequer funded a €4 billion capital injection into Anglo Irish Bank. In 2009 also, the National Pensions Reserve Fund (NPRF) provided for the separate €3.5 billion recapitalisations of Allied Irish Banks (AIB) and Bank of Ireland (€7.0 billion in total). The 2010 one per cent of GNP Exchequer contribution to the NPRF was frontloaded into 2009 to assist with these recapitalisations.

In 2010, €25.3 billion was committed to be provided to Anglo Irish Bank by way of Promissory Note. The terms of the Promissory Note provides, inter alia, that 10 per cent shall be paid to the Note holder each year. The first such payment, amounting to €2.53 billion, was made to the institution in March 2011. There was no Exchequer expenditure associated with this Promissory Note in 2010.

In 2010, €5.3 billion was also committed to be provided to Irish Nationwide Building Society (INBS) by way of Promissory Note. Like the Anglo Note, the terms of the INBS Promissory Note also provides, inter alia, that 10 per cent shall be paid to the Note holder each year. The first such payment, amounting to €530 million, was made to the institution in March 2011. There was no Exchequer expenditure associated with this Promissory Note in 2010. The combined payment to Anglo Irish Bank and INBS in March 2011 was €3.06 billion and this sum is provided for in the end-March 2011 Exchequer Statement under Note 6 "Non-Voted Capital Expenditure".

In 2010, €250 million was also committed to be provided to Educational Building Society (EBS) by way of Promissory Note. Payment of the original principal sum will be made in equal annual instalments of €25 million, beginning in June 2011. There was no Exchequer expenditure associated with this Promissory Note in 2010. In 2010 also, the NPRF injected a further €3.7 billion in capital into AIB. As this injection was sourced from the NPRF, it did not impact on Exchequer spending in 2010. Finally, in 2010, the Exchequer provided €625 million to EBS by way of a special investment share and €100 million to INBS by way of a special investment share. This method of investment gave the State extensive powers and full economic ownership of the two building societies.

As regards interest payments, Exchequer interest payments on the national debt amounted to €1.5 billion in 2008, €2.5 billion in 2009, and €4.1 billion in 2010. Budget 2011 projected that Exchequer interest costs on the national debt would total €4.2 billion in 2011, with an additional €0.6 billion in national debt interest expenditure being sourced from the Capital Services Redemption Account (CSRA), bringing total debt interest expenditure in 2011 to an estimated €4.8 billion at Budget time.

Exchequer debt interest costs in the first quarter of 2011 were €791 million. In addition, a further €577 million in interest expenditure from the CSRA was used to fund debt interest costs in the first quarter of 2011. The full debt interest cash cost (including CSRA) was therefore €1,368 million. My Department is in the process of revising its macroeconomic and fiscal forecasts, including debt interest projections, as part of the Stability Programme Update which must be submitted to the European Commission by the end of April.