The National Debt


#501

Note from Yogans link.

Estimated net outturn to the State from banking stabilisation
measures as at end-2018 €41.7bn
Estimated long-term recurring annual cost of servicing the debt €1.1 billion to €1.3 billion a year

That means each and every year forever as we are not able to €0 the debt off.

Range assuming interest rates of 2.5% to 3.0% per year; actual cost will be determined by the
amount realised from remaining investments and by State’s cost of borrowing.

On a good day (not today) we might get €10bn for our banks shares if we sold them, But that still leaves us paying €800-900m a year in interest, forever and ever and ever and ever more. :frowning:

Put another way, every working taxpayer now pays at least €50 a year simply for the privilege of owning these turds, no matter whether we sell them off or not. :frowning:


#502

It’s funny that on the weekend of the guarantee, Sidewinder and I reckoned the cost of the bank guarantee would be about 47bn, given the turd-assets the banks had, international comparisons, and inevitable outcomes.

If you add in what shareholders &c lost, 47bn seems quite close.

Still, no-one could have predicted it, and that’s the funny bit…


#503

https://www.esr.ie/article/view/1253

Have Irish Sovereign Bonds Decoupled from the Euro Area Periphery, and Why?


#504

Ah Jayis lads, I made that ‘decoupling’ point months ago. Furthermore we have recoupled with Germany if anything.


#505

In about an hour he will have retired.

Bye Bye Super Mario. :slight_smile:


#506

En Garde!


#507

His farewell speech was a model of its kind, combining an expansive defence of his record with a call for action in key areas. He identifies a key weakness in Europe’s Financial architecture- the absence of a substantial fiscal capacity - but he acknowledges that the political will is lacking.

Of course he would have preferred if he could have unwound the Extraordinary measures of QE but the weakness of the German economy stayed his hand.

https://www.ecb.europa.eu/press/key/date/2019/html/ecb.sp191028~7e8b444d6f.en.html


#508

The amount of corporation tax coming in was so high, this month, that the NTMA pulled a bond auction due on the 14th of November because the money was seemingly not required.


#509

That’s good marketing for the next one.


#510

Does that mean they are paying down real debt with the windfall CT - really? Sounds far too logical and prudent for a government 6 months from an election and thousands of people waiting on trolleys in A&E


#511

Not really, they are holding at around €205bn with a Brexit warchest ,until

a) UK exits with ‘A deal’
b) UK negotiates and signs a TRADE deal by end 2020 …allegedly, :smiley:

So there is no real wiggle room for paying down anything unless we are in actual possession of t(EG) that Apple windfall between now and the end of September 2020…in which case, of course, there will be.

Even then that windbag buffoon Johnson will be rowing with Barnier for all of 2020 so really…should we??? :frowning:

If we had the Apple windfall by March 2020 (in cash),and the UK finally passes ‘the deal’, and the UK negotiates a trade deal in 2020 and also signs it, then we would have a Gross Debt under €190bn by the end of 2020 and also below €200bn for the very first time since 2012.

I predict it will be around €205bn at end 2019 though (it was €215bn in 2013 mind) .

Forgot to mention that NAMA will pay off its residual bonds (€1bn) in H1 2020 and will transfer €2bn of its cash pile to the NTMA during H2 2020. It will dribble over another ~€2bn-~2.5bn as it completes speculative developments in the Docklands and Poolbeg SDZs (its main area of operations now) between 2020 and the final NAMA wind down in 2025. €2bn is not a windfall in this case but neither is it a kick in the head. :slight_smile:


#512

Blockquote S&P upgraded Ireland’s rating from A+ to AA-, the level it was at prior to the financial crisis and bailout by the Troika and the fourth highest possible long-term debt rating from the firm.
It also assigned a stable outlook to the rating and upgraded Ireland’s short-term rating from A-1 to A-1+, S&P’s highest short-term rating.


#513

A SURPLUS of €1.4bn likely means that the government is to start the year needing to borrow €1bn less than forecast in October.

https://www.gov.ie/en/publication/092b67-fiscal-monitor-december-2019/

Probably indicates a gross debt (barring any windfalls) of around €203-204bn at the end of 2020.


#514

A surplus (albeit a meagre one based on 7% growth in taxable income) going into the general election is exactly what adult voters want to hear. It might help to convince people there’s a cigarette paper or two between FG and the rest of them.


#515

Looks like we are on our own again and out of the European Debt ‘Procedures’ as the Debt/GDP ratio might have squeaked in JUST under 60% at end 2019 (not official until April), We borrowed 1% of GDP this week alone and will pay off 3% of GDP in one operation in early April.

As the debt itself will drop ~ €10bn to the end of this year simply owing to less NTMA cash in hand requirements for the next few years we look like finishing the year with a ratio well under 58% of GDP. The Brexit cliff has been moved back a year though. :frowning:


#516

@2Pack

Why aren’t we cashing in our US$ bonds and paying off our own debt?

I get it’s good to hedge but surely not on this scale.


#517

AFAIK, that’s not government held.


#518

Ahh, ok thanks.


#519

The NTMA has not issued $ denominated debt for many years, possibly not since the 1980s. They did once though.

By the time Garrett got rid of Haughey in 1982 Debt Servicing took up around 13-14% of Government Revenue and currency movements like the appreciation of the $ under Reagan made things worse.

All debt now is in € only other than the rump £2bn of UK Bilateral which largely goes this year (ends Feb 2021) and is cheaper to redeem given the fall of the £ in recent years and Debt Servicing overall will cost around 5% of Government Revenue in 2020 or around €4 - €4.4bn vs €90bn or so. ,

Brexit warnings as standard of course and economies can go up as well as down.


#520

If not the NTMA, who in Ireland is holding $274Bn. in US Treasuries?

Fifth-largest holding in the world.

Those lads/lassies in the IFSC must love Uncle Sam :thinking: