Michael Noonan: 'I am hopeful State will recoup €30bn from banks'
Mr Noonan tells Dail Government will not use ESM to recoup money pumped into AIB
Finance Minister Michael Noonan told the Dail today that using the European Stability Mechanism bailout fund to recapitalise Allied Irish Banks is not the best option.
Speaking earlier he indicated that the taxpayer could see a potential return from the banks of up to €30bn over time.
However, he told the Dail today that the European Stability Mechanism will not be used to recapitalise Allied Irish Banks.
Earlier Mr Noonan said: “It is worth pointing out that this year, the level of GDP in Ireland will likely return to its pre-crisis peak; however it will be more balanced than during the bubble years, not relying too heavily on any one particular sector.”
Speaking during an opposition private members debate on the need for a debt conference, Mr Noonan rejected claims that Ireland’s debt is unsustainable.
“Our debt is sustainable – evidenced by the fact that borrowing costs are the lowest on record,” he said.
He also rejected claims that the bulk of the country’s debt resulted from rescuing the banks in 2008.
He said it was important to correct the misperception that Ireland’s debt is mainly due to banking debt.
“In fact the bulk of our debt relates to the mismatch between revenue and expenditure as a result of inappropriate policies adopted during the 2000s. Between 2008 to 2014, the gap between the income and expenditure of the State on services and excluding banking support, totalled around €100 billion,” he said.
Mr Noonan, in one of his key interventions, said that the Government is hoping to recoup as much as €30bn from the bailed out banks, given the improving state of the economy.
“I am confident that with ongoing economic recovery we will recover at a minimum the €18 billion that this Government invested and up to the €30 billion invested in the pillar banks and PTSB,” he told the Dail.