Terence Flanagan (Dublin North East, Independent)
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56. To ask the Minister for Finance his plans to get a deal on bank debt; and if he will make a statement on the matter. [53615/13]

Michael Noonan (Limerick City, Fine Gael)
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The Government has worked hard to reduce the burden of the banking-related debt. In February 2013 the arrangements that replaced the promissory note resulted in significant benefits to the State including spreading the cost of the Promissory Notes from a weighted average life of c.7-8 years to c.34-35 years at a lower funding cost for the State, resulting in significant annual interest savings.

The State has now recouped a net positive cash return of circa €1.1 billion from its overall investment and support to Bank of Ireland. Therefore there is no question of the State seeking to recoup the monies invested in that institution via retrospective recapitalisation or other means.

AIB is forecasting that it will deliver a profit in 2014 which would likely increase investor interest in the bank.

As the Deputy is aware, on the 20th June 2013 the Eurogroup of Euro-area Finance Ministers agreed to consider retrospective recapitalisation of banks on a case-by-case basis once the European Stability Mechanism (ESM) direct recapitalisation instrument enters into force. This also provides a potential mechanism for Ireland to recoup some of the funds it placed in the banks following the onset of the banking crisis. I do not want to tie the future of the banks or the banking system solely to the ESM as the outcome in relation to Bank of Ireland has demonstrated that further more attractive options may become available to the State. However, it is important that the option of access to the ESM is in place.