Michael McGrath (Cork South Central, Fianna Fail)
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Question 134: To ask the Minister for Finance when Ireland will make its first capital contribution to the European Stability Mechanism; the size of the contribution; the way it will be funded; the dates on which future contributions are due to be made; and if he will make a statement on the matter. [36795/12]

Michael Noonan (Limerick City, Fine Gael)
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The capital structure of the European Stability Mechanism (ESM) is set out in the ESM Treaty which was signed by Euro Area Member States on 2 February 2012. To obtain the highest possible credit rating, the capital structure of the ESM will have a total subscribed capital of €700bn. Of this amount, €80bn will be in the form of paid-in capital by the Euro Area Member States, paid in five equal instalments. The balance of €620bn will be callable capital. Ireland's share of the €80bn in paid-in capital, based on our contribution key set out in Annex 1 of the ESM Treaty, will be just above €1.27bn paid in five equal instalments of €254m. This will be paid out of the Central Fund. The ESM is being established as an International Financial Institution and on that basis Ireland's contribution will be treated as a financial transaction. This means that while it will impact on Ireland's Exchequer Borrowing Requirement, it will not impact on its General Government Deficit. Ireland's share of the €620bn callable capital is based on the same key, i.e. 1.592% of €620bn making the callable capital €9.87bn.

Article 41 of the ESM Treaty provides that the first instalment shall be paid by each ESM member within fifteen days of the date of entry into force of the ESM Treaty. However, as the Deputy will be aware, due to on-going legal challenges to the ESM Treaty in a number of Euro Area Member States, including Ireland, the date of the ESM coming into force is not yet certain but it is hoped that the Treaty will come into force sometime in early Autumn. The first instalment of paid-in capital will become payable within fifteen days of that date.

In terms of future contributions, that is, the four remaining instalments to be paid to the ESM, the Eurogroup decided on 30 March 2012 that the paid-in capital would be made available more quickly than initially foreseen in the original ESM Treaty with two tranches to be paid in 2012, one in July and one in October 2012, two tranches to be paid in 2013 and a final tranche to be paid in the first half of 2014. The contribution planned for July will not proceed as the ESM has not yet come into force and also as Ireland has yet to ratify the Treaty. As already indicated, the first instalment will be payable by Ireland within 15 days of the date of entry into force of the ESM Treaty provided Ireland has ratified the Treaty by that date.