Bernard Durkan (Kildare North, Fine Gael)
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Question 82: To ask the Minister for Finance the extent to which all of his EU colleagues both inside and outside the eurozone are likely to commit themselves to the principles set out in the Fiscal Stability Compact; the implications arising from failure to do so in either context; and if he will make a statement on the matter. [10269/12]

Michael Noonan (Limerick City, Fine Gael)
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This is a matter for each Member State concerned but I have no reason to doubt that all those Member States that sign up to the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union will commit themselves to the principles contained in it. Of course, if a Member State does not comply with its requirements it can be held to account and may, for example, be brought before the Court of Justice of the European Union for failing to comply with Article 3(2) of the Treaty.

Bernard Durkan (Kildare North, Fine Gael)
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Question 83: To ask the Minister for Finance the extent to which the economic fundamentals have changed in the course of the past five years with particular reference to the need to achieving established and or accepted targets for borrowing, lending, growth and debt ratios; and if he will make a statement on the matter. [10270/12]

Michael Noonan (Limerick City, Fine Gael)
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The last number of years have been very difficult for the Irish people. The economy contracted in real terms by 10 per cent between 2007 and 2010 and this has been accompanied by severe fiscal and banking crises. Reflecting the substantial improvements in competitiveness which have taken place in recent years the economy returned to growth during 2011. We are also seeing a resumption of inward Foreign Direct Investment which points to the fact that many of the underlying strengths of our economy remain, including a well-educated workforce, favourable demographics, an open and flexible economy and a pro-enterprise environment.

Of course there are many challenges which we still face and it will take time to work through the legacies of the crisis. Not least of these is the high level of Government debt which we have accumulated as a result of the substantial fiscal deficits that were recorded in each of the last four years and the very significant costs of providing support to the banking sector. Substantial corrective action has been taken to return stability to the public finances and while the General Government Debt is now forecast to peak at 119 per cent of GDP next year, it is expected to decline to 115 per cent by 2015 based on current projections. We are also on track to bring the deficit below 3 per cent of GDP by 2015, in line with the targets set out under our EU/IMF Programme of Financial Support.

In relation to targets for bank-lending, the banking system restructuring plan creates capacity for the two Pillar Banks, Bank of Ireland and AIB, to provide lending in excess of €30 billion in the next three years. SME and new mortgage lending for these banks is expected to be in the range of €16-20 billion over this period. This lending capacity is incorporated into the banks' deleveraging plans which allow for repayment of Central Bank funding through asset run-off and disposals over the period to 2013.

The Government has imposed lending targets on the two domestic pillar banks for the three calendar years, 2011 to 2013. Both banks were required to sanction lending of at least €3 billion in 2011, €3.5 billion this year and €4 billion in 2013 for new or increased credit facilities to SMEs. Both have indicated that they have achieved their 2011 targets. The pillar banks are required to submit their lending plans to the Department and the Credit Review Office (CRO) at the beginning of each year, outlining how they intend to achieve their lending targets. The banks also meet with the Department and the CRO on a quarterly basis to discuss progress.