How much do we owe?
|2009|2010
Gross National Debt|97 |110
Anglo & Nationwide Promissory Notes|0|31
Non-commercial semi-state debt|6|6*
Local Government Debt|1|1*
General Government Debt|105 | 149
Cash on hand|22 |16|
Net total debt|83 |133
*These figures are estimated, as they have not been calculated yet.
Various sources: NTMA and Department of Finance
How much of this is due to Anglo and Irish Nationwide?
Around €35 billion, none of which we will get back.
(€4 billion put in in 2009 plus €31 billion promissory notes issued in late 2010)
How much of this is due to bailing out AIB and Bank of Ireland?
None of it.
The National Pensions Reserve Fund has put €10.7 billion into AIB and Bank of Ireland and is planning to put a further €10 billion into it.
It is argued that this has not affected our borrowings. However, it has run down our cash resources. While we are not going to get back the money which went into Anglo and Irish Nationwide,the money put into AIB and Bank of Ireland is regarded as an investment as its purpose was to replenish the reserves of the bank. It is hoped that this money might be recovered in time. However, some believe that this is wishful thinking and that we won’t get the money back.
If we owe €133 billion, and Anglo and Irish Nationwide cost us €35 billion, where did the other €99 billion in borrowing come from?
The €99 billion is the gap between what we have raised in tax and what we are spending each year.
Cumulative borrowing up to Dec 2007|€46 billion
Government deficit 2008|€13 billion
Government deficit 2009|€19 billion
Government deficit 2010 |€18 billion
Total at
30 December 2010
|
€96 billion
Projected deficit for 2011|€15 billion
Projected deficit for 2012|€12 billion
Projected deficit for 2013
|
€9 billion
Projected deficit for 2014
|
€5 billion
Expected cumulative deficit by 2014|€137 billion
Add Anglo and Nationwide debt
|
€35 billion
Total |€172 billion By how much were we living beyond our means in 2010?
Tax revenue|€35 billion
Government Expenditure|€53 billion
Deficit|€18 billion
The published deficit is €48 billion due to the €30 billion extra for Anglo and Irish Nationwide. But €18 billion is the underlying and ongoing size of the problem.
But I thought that the banks had brought the country to its knees?
If we had never heard of Fitzpatrick or Fingleton, we would still owe €96 billion today and we would owe €137 billion by the end of 2014.
How much of our national debt is due to NAMA?
None of it.
NAMA buys property
loans from the banks. It issues bonds in exchange. These bonds are government guaranteed but they do not appear in the borrowing above. It is hoped that NAMA will get all its money back over time. So far, NAMA has issued €30 billion in bonds and it has plans to issue a further €12 billion.
Why do we have to borrow so much from the EU-IMF?
The EU-IMF are providing us with the equivalent of an overdraft facility of €67.5 billion. We are providing a further €17.5 billion ourselves from the National Pensions Reserve Fund and from running down our own cash resources.
Deficits 2011/12/13/14|€40
payments for Promissory Notes|€10
Recapitalise AIB and BoI|€10
Contingency fund|€25
Total|€85
So will our borrowing increase by €85 billion?
No. The €10 billion going into Anglo is already included in our General Government Debt figure of €130 billion. This will not increase our stated borrowing.
The €10 billion from the National Pension Reserve Fund is not included in our borrowing.
So the National Debt will increase by the €40 billion which we are spending on living beyond our means.
There is a contingency fund of €25 billion which we may or may not draw down.
I thought we had €20 billion cash in the bank which would last us until the end of the year?
No. We probably had over €20 billion in September 2010, but the international bond markets stopped lending to us then, so we have been running down our cash balances since then.
At the end of December, we had €16 billion
We have spent some of that so far in 2011.
We have also committed €7.5 billion towards the €85 billion total bailout package.
What other problems do we have?
We have guaranteed the deposits and some of the senior bonds in all the banks. The Central Bank has lent €52 billion to Irish banks. If AIB and Bank of Ireland become insolvent, our debt would rise dramatically.
How much would burning the banks’ bondholders save us?
To be completed
There is about €20 billion in bonds outstanding.
How much would renegotiating the EU-IMF deal save us?
Not a huge amount in the overall context of things.
We will draw it down over 4 years.
We may draw down only €42.5 billion of it
If we draw down all €67.5 billion of it, then it would cost us around €4 billion a year.
