asked the Minister for Finance the total State borrowings from March, 1973 to date, the source of each loan, the amount, and the interest and repayment terms of each loan.
Ceisteanna—Questions. Oral Answers. - State Borrowings.
15.
As the reply is in the form of a tabular statement, I propose with the permission of the Ceann Comhairle, to have it circulated with the Official Report.
Following is the statement:
1. Government Domestic Borrowing from 31st March, 1973 to 31st December, 1974.
THE figure for domestic borrowings can only be complied at the end of the financial period because of the fluctuations in the sales of Irish Government Securities etc. throughout the year.
|
Loan |
Source |
Amount |
Payment of interest and repayment terms |
|
(£ million) |
|||
|
11% National Loan 1993/98 |
General Public |
16.4 |
Interest payable semi-annually. Redeemable in full at par in 1998. |
|
12% Convertible Stock, 1979 |
General Public |
17.7 |
Interest payable semi-annually. Redeemable in full at par in 1979. A conversion option with this loan is operable in 1979. |
|
Sales of New Tranches of various Government Funds through Departmental Funds (Interest Rates between 4¾% and 12% |
(a) General Public(b) Commercial Banks |
50.9124.4 |
Interest payable semi-annually. Various redemption dates between 1973 and 2005. |
|
Small Savings |
General Public |
36.2 |
Various methods of interest payments. Loans at call. |
|
Borrowings from Sinking funds (3½%) |
,, |
59.6 |
Interest payable quarterly. Loans at call. |
|
Miscellaneous borrowings |
,, |
3.5 |
Various interest payment and redemption dates. |
|
Total |
308.7 |
2. Government External Borrowing since 31st March, 1973, to date.
|
Loan |
Source |
Amount |
Payment of interest and repayment terms |
||
|
Original currency (million) |
Irish pound equivalent (£ million) |
||||
|
Ireland 6½% Notes, 1973/81 |
Switzerland |
SW. Fr. |
150.0 |
20.0 |
Interest payable annually. Redeemable in full in 1981. |
|
9% Algemene Bank Nederland Loan |
Netherlands |
Dfl. |
100.0 |
15.5 |
Interest payable annually. Redeemable in four annual instalments commencing 1981. |
|
EIB 8½% Loan (First Telephone Project) |
,, |
US$ |
8.6 |
||
|
Lux. Fr. |
72.0 |
Interest payable semi-annually. Redeemable in semi-annual instalments from 1978 to 1993. |
|||
|
£ |
3.0 |
7.5 |
|||
|
Ireland 9½% Belgian Franc Loan |
Belgium |
B. Fr. |
1,000.0 |
10.2 |
Interest payable annually. Redeemable in three annual instalments commencing 1982. |
|
Ireland 9¾% EUA Bonds 1974/84 |
Eurobond Market |
EUA |
20.0 |
10.0 |
Interest payable annually. Redeemable in ten annual instalments commencing 1975. |
|
US Dollar Revolving Credit Facility (variable rates of interest) |
Eurodollar Market |
US$ |
175.0 |
74.6 |
This is made up of various short-term loans. Interest is paid on the maturity date of each loan. The loans may not be renewed after 1977. The Facility expires in 1981. |
|
EIB 10½% Loan (Second Telephone Project) |
,, |
US$ |
13.3 |
Interest payable semi-annually. Redeemable in semi-annual instalments from 1979 to 1986. |
|
|
£ |
3.8 |
9.5 |
|||
|
9% Kuwait Dinar Notes, 1979 |
Kuwait |
K. Dinaras |
5.0 |
7.2 |
Interest payable annually. Redeemable in full in 1979. |
|
9% UAE Dirham Bonds, 1984 |
United Arab |
UAE |
16.2 |
Interest payable annually. Redeemable in full in 1984. |
|
|
Emirates |
Dirhams |
150.0 |
|||
|
10¼% Dutch Guilder Notes |
Netherlands |
Dfl. |
50.0 |
8.3 |
Interest payable annually. Redeemable in full in 1979. |
|
Other smaller loans |
various |
various |
18.2 |
Interest payment varies between annual and semi-annual Redemption dates between 1977 and 1993. |
|
|
Total borrowed abroad since 31st March, 1973 |
£197.2 |
Will the Minister tell the House the total figures involved?
Total domestic borrowing from 31st March, 1973 to 31st December, 1974 was £308.7 million and total external borrowing from 31st March, 1973 to date is £197.2 million.
16.
asked the Minister for Finance the total amount of money borrowed externally by the Government during the year 1st April, 1974, to 30th March, 1975; and the annual amount payable in interest thereon.
The total amount of money borrowed externally by the Government during the year 1st April, 1974, to 30th March, 1975, amounted to some £150 million. The annual interest payments on these borrowings, at current exchange rates, will be about £15 million.
17.
asked the Minister for Finance if he will state in respect of the figure of £172 million under the heading of "Other Borrowings" in the table of receipts into the Exchequer between 1st January and 13th May, 1975 (a) the names of the banks and countries involved (b) the reason for the extent of such borrowing as compared with the corresponding figure for last year of only £3.69 million (c) the interest rates and (d) the repayment date of each loan.
The figure of £172 million mentioned by the Deputy is a gross borrowing figure against which should be set the repayment figure of £116 million on the issues side of the Exchequer statement. The net figure is £56 million. The money has been advanced to the Exchequer under temporary overdraft facilities by the Central Bank. As this facility was extended only towards the end of last year, the figures for the period up to 13th May, 1974, would not have contained any comparable amounts. The interest rate is the same as the Associated Banks AAA overdraft rate which varies from time to time but which on 13th May, stood at 10¾ per cent. As the facility is on a day-to-day basis there is no set repayment date that specific advances must be repaid as quickly as possible but at any rate within a year.
Is the Minister not worried that the Government are borrowing at the rate of £10 million per week? How long will the Government be able to continue doing this before the country is bankrupt?
The Deputy is aware that the opinion of every international institution of repute is that a country like Ireland, affected by the oil imbalance, should borrow in the short term. It is the Government's long publicised strategy to borrow in present circumstances but to reduce the borrowing over a period.
Will the Minister state if that advice is still being given against the background of the declining value of the £ and a galloping rate of inflation of up to 25 per cent? Surely the Minister will agree that is economic nonsense?
It is not possible to look at any particular economic force in isolation. As the Deputy knows, they are inter-related. What I have said about the Government's economic policy is still true, namely, that our circumstances require borrowing on a more substantial scale now than anything we experienced previously. The alternative to such borrowing would be to cause a devastating slump in the economy which would have the most harmful economic and social effects. The Government are very carefully assessing the situation and, as the requirements of the day dictate, borrowings will be made according to our capacity to repay as well as current needs.
Does the Minister not agree that is dangerous gambling?
It is dangerous and irresponsible.
No. It would be much more dangerous to cause massive economic and social distress from which it would take this country many years to recover.
(Dublin Central): Whatever justification there may be for excessive borrowing on a capital budget, surely the Minister will agree it is economic disaster to continue to borrow excessively on a current budget?
There are circumstances where borrowing on a current budget is fully justified and there are very few countries in the world, other than the OPEC countries, that are not doing so today. If countries followed the Fianna Fáil prescription the world recession, which today is worse than anything previously experienced, would be immeasurably worse.
Is it not true that the other countries to which the Minister has referred have come to grips with and have overcome their inflationary problems and that rather than devaluing their currencies they are maintaining and increasing their values?
I do not know of any country that has come to grips with or has solved its inflationary problems. Because of the economic recession throughout the world, countries are being forced to operate with unprecedented deficits on current budgets. If they did not do so the distress in the world would be much greater than it is.
Is it not true that of the EEC countries, the United States and many of the OECD countries only Britain and Ireland have failed to conquer the problem of inflation?
I would not say the others have conquered the problem. They have been more successful in controlling their rate of inflation.
They have turned the graph in their favour.
We cannot debate this question all afternoon. I am calling Question No. 18.
The forecasts made by several countries earlier in the year have not materialised and they have been less successful than they thought they would be.
All of these countries have been able to achieve a decrease in the inflationary trend and the graph has turned in their favour.
They are moving in the right direction and we also will soon move in the right direction.