The National Debt



This sort of gibberish makes my head sore. How old are you ? It’s like listening to somebody else’s 5 year old telling a story.


So just more plain old national debt that my kids will be paying for?


The NTMA raised €6bn priced as a sort of tracker at around 0.3% interest for 7 years. There was a hole in the repayment profile in 2027…we had very very few liabilities in that particular year. Bid cover ratio was over 5x, a very healthy interest.

All 2020 redemptions are now more than covered and the next task will be to cover excess government spending during 2020.

EU Finmins are discussing coronabonds again today …probably as a ‘special’ ESM for slow learners in Italy and Spain and perhaps even France.

In addition Lagarde and the ECB will start a special Bond Purchase exercise of around €750bn …again mainly this year and on top of the Draghi purchases which are to roll over.

So far the NTMA is highly liquid an the gyrations in the sovereign bond market have passed us by. May this remain so. :slight_smile:


Nope, that did not work. :frowning: Italy wants free money and is too important to join the ESM, even the 2 special ESM lite programmes discussed last night. (RFI and the "Pandemic Crisis Support Enhanced Conditions Credit Line " ECCL they were called at the time, ESM lite in effect).

Off they go tomorrow again. :frowning:


12 days ago I said

Talk of a Eurozone breakup is not just crying wolf.

I didn’t expect things to escalate so quickly

Italy won’t accept austerity- that’s for small countries. France is backing them (as are we!).


We would be well advised to stay right the fuck out of any French plan to mutualise Italian debt. :frowning:


For some reason I’m reminded of Goodfellas.


19 October 2020 €750m -0.25% 3.1 times


At the time of the first crash (2007 onward), word was how Italian debts were to a large extent owed to French banks. Is ‘mutualise’ just another term for France socialising its losses again?


Google is your friend.

Word around 2007 was that Irish debt was held by French banks or was it German pension funds. That didn’t stand up either.


@Lefournier3 Lets revise the end 2020 projections after Pascal spoke yesterday.

We started 2020 with 2019 GDP estimated at €339bn (march 6 upthread) and the government was to have a surplus at end 2020. Pascal now believes.

Economy will be -10.5% which is €339bn - €36bn to leave an economy of €303bn.

We also started the year at around €204bn of debt and Pascal is looking at borrowing €23bn on top of that to leave the debt at €227bn

€227bn of debt off an economy of €303bn is a Debt/GDP ratio of 75%. at end 2020.

A second scenario was posited, a longer lockdown with

An Economic Contraction of 13.8% leaving an economy of €292bn in 2020
Government borrowing in that case of €27bn which when added to €204bn gives us €231bn

€231bn of debt off an economy of €292bn is a Debt/GDP ratio of 79%. at end 2020.

My prediction, a month back here, was a Debt/GDP ratio of 80-85%.


Your estimate was prescient or at least close to current official thinking, but the downside risks are huge and largely dependent on medical developments. The worst case scenario is catastrophic.

The key issue is whether we can recover in line with the global recovery whenever that may be.

The full Stability Programme Update is here


No problems with this at all at all. €6bn deficit in April alone

Exchequer figures to signal budget deficit heading to €30bn this year
By Eamon Quinn

Exchequer figures published this afternoon are set to show the mounting toll the State faces from the Covid-19 economic storm and will point to the Government budget deficit soaring to €30bn this year.

For the first time, the tax and spend figures will reveal the huge sums spent in the first full month of the Covid-19 lockdown, as the numbers in receipt of some form of pandemic payment, wage support, or for people who lost their job during the early weeks of the crisis, raced towards the 1.1 million mark.
An analysis by the Irish Examiner shows the latest returns will likely reveal that the exchequer deficit of over €3.1bn in April last year will likely have ballooned to as much as €6bn.

The April figures out later today will put the focus on the additional costs of the pandemic unemployment and wage-support payments – which could have reached €1.7bn in April-- as well as the additional healthcare costs of potentially €300m.

The exchequer figures already published for March showed the huge hit suffered to the exchequer’s tax revenues in just the first two weeks of the lockdown.

The impact will not be as dramatic but nonetheless the exchequer will likely see a further hit of €1bn in April to its tax revenues, which will help push the total deficit for the exchequer towards €6bn in the month.

Separately, figures published last night by the Department of Employment Affairs and Social Protection showed 27% of the labour force in the South-West region were in receipt of some sort of crisis pandemic payment.


So the tunnel to Scotland is shelved for a year or two…


The article states that 27% of the workforce in the south west is now reliant on State payments.

However, it then goes on to state

There were 83,100 in the South-West, accounting for 24% of the labour force in the region, in receipt of a pandemic payment, and a further 44,900 people, or a further 13% of the labour force in the region, in receipt of the wage-support scheme.

That seems to be 37% rather than 27%.

So, to extrapolate the figure from the South West across the country (if applicable and correct), basically 2 out of every 5 members of the workforce (aged 18-65) in receipt of welfare.

Q4 2019 Irish Labour force numbers appear to have been as follows -

|In labour force|2,471,700|
|Not in labour force|1,471,000||

So a rough calculation of 2,471,700 * .37 = 914,529 currently in receipt of welfare.

That gives 2,471,700 - 914,528 = 1,557,171 currently in work.

Wikipedia says theres in the region of 305,000 public servants working in Ireland.

So 1,557,171 - 305,000 = 1,252,171

Meaning in the region of 1,252,171 people currently engaged in wealth creation in the State.

Rough population of the State is 4.9 million.

1,252,171/4,900,000 = .255 (25%)

Therefore, by these calculations only 1 in 4 people are engaged in wealth production at the minute in Ireland. Plus how many of them are operating at significantly decreased capacity?

Seems pretty stark (so hopefully my figures are incorrect). I wonder what the figures were for transitional states such as post communist eastern european countries leading up to and after 1989 etc.


I think the general figure out there for: On the dole (est. 205,000), On the pandemic support (598,000) and in the Wage subsidy scheme (427,000) is circa 1.2m.

So you’d need to add the 300,000 public servants to that = at least 1.5m on the Public payroll. Out of 2.5m in the workforce = 60% or thereabouts.

Or 2.5m-1.5m = 1m not on the public payroll/4.9 population = 20/21% in ‘wealth production’. The 4.9m population figure is possibly understated and all.

Just as well our conservative government ran prudent fiscal policies over the last 5 years. Oh wait…….

Detailed figures of each type of support are in the attached:
ovid-19 unemployment payment recipients rises to nearly 600,000


You could add to that a whole range of companies and institutions whose jobs are almost entirely reliant on government and local authority funding-ngo’s, suppliers, contractors, the arts, legal etc. There’s got to be at least another 100k there…


This is a paywalled report in the Currency by Ian Kehoe on Workday.
But with various shenanigans hinted at here, depending on timing, Q1 and Q2 2020 GDP will be even more susceptible to Leprechaun economics than usual.

Intellectually profitable: How an Irish subsidiary with no revenue and no staff made – and then made disappear – a $5bn profit

Using a string of complex corporate transactions, an Irish subsidiary of the software giant Workday managed to pull off quite the feat: it made a $5bn gain, before making it disappear.

There is a little more


Baseline scenario from ESRI today.

Economy -12.4%.
Borrowings +€30bn if covid payments are extended.


€339bn (Q4 2019) - 12.4% leaves an economy of €339-€42bn or €297bn

Borrowings go from €204bn (Q4 2019) to €234bn at end 2020.

Debt of €234bn in an economy of €297bn is a debt/gdp ratio of 79%. at end 2020*