Barry Cowen (Laois-Offaly, Fianna Fail)
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Question 80: To ask the Minister for Finance if the explicit permission of the European Commission, the ECB and IMF has been received to allow the State to use any remaining balance of the €35 billion, originally earmarked for the banking system, to fund the Exchequer once the bank recapitalisation scheme has been completed. [18575/11]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware, the EU – IMF support programme provides for a total of €85 billion in financial support from both internal and external sources – with €17.5 billion of this being provided from our own resources. When the programme was announced €50 billion was identified as being available for the exchequer funding with the remaining €35 billion identified as being for the banking sector. Following the recent banking stress tests carried out by the Central Bank – the amount identified as being required for the banking sector was reduced to €24 billion including €3 billion of funds which take the form of contingent capital. However, it is anticipated that mitigating actions, such as burden sharing, will mean that up to €5 billion of this €24 billion will come from private sector sources.

The budgetary forecasts contained in the recently published Stability Programme Update (SPU) prudently assume that an additional €20 billion in State support to the banking sector will be required. On that basis, some €15 billion of the funding originally earmarked for the banking sector is available for use for sovereign purposes, bringing the potential total available under the Programme for exchequer funding purposes to €65 billion. The release and use of all externally provided funding is dependent on the continued satisfaction of the programme conditions – as verified by the quarterly review process.

During the course of the forthcoming quarterly review, the financing plan for the remainder of the Programme of Support will be discussed with the Troika and the question of how to use any remaining balance taking account of the lower banking recapitalisation cost will be addressed in that context.