The Department of Finance has said the additional €448 million released to the Exchequer this week following the sale of a stake in AIB will not be used to boost spending in the budget.
When the Government sold the initial 25% stake at €4.40 per share in AIB's IPO it sold an additional 3.7% of the bank, raising extra cash that was held in reserve by Deutsche Bank.
The money was to be used to support the share price in the event of it falling in the aftermath of the flotation.
However, with the share price now above €5, Deutsche Bank has declared the stabilisation period to have ended.
That will allow the remaining €448m from the IPO to be remitted to the state coffers. It brings the total proceeds from the IPO to around €3.4 billion.
Officials appearing before the Public Accounts Committee today said the €448m would be used to pay down Government debt.
Fianna Fáil's Marc McSharry said the message sent out to the media was that this extra money would "go back into the exchequer".
"Is that an indication that the fiscal space may be different, or is there an assumption that this is going to be paid off the €201 billion," asked Mr McSharry.
Secretary General of the Department of Finance Derek Moran said "Government policy on this is straight up, that one off sales of assets go against the debt".
Mr McSharry then asked whether it was "an absolute European rule, or an interpretation of European rules that this money was not spendable".
Ann Nolan, Department of Finance Second Secretary, said it was "an absolute European rule" that this money had to be used to pay down debt.
