Dáil Éireann Debate, Wednesday - 16 December 2009
100 Deputy Joan Burton asked the Minister for Finance the circumstances under which a State capital injection into State owned Anglo Irish Bank would impact on the general Exchequer balance; if a loss is made on such capital injection, the way and when this would impact on the general Exchequer balance; and if he will make a statement on the matter. [47287/09]
View answerThe capital injection by the State of €4 billion into Anglo Irish Bank in 2009 did not impact directly on the GGB. The injection was treated under National Accounting rules as a financial investment, and under Eurostat rules, does not count for GGB accounting purposes. The interest on the €4 billion borrowed in order to make the capital injection does have negative effect on the GGB. As a general rule of thumb, each €1 billion extra borrowed is estimated to cost the Exchequer about €60 million per year in interest costs. Such interest costs are included as part of the estimate of the General Government Balance, GGB. The GGB impact of any potential future capital injection to the banking sector would depend on the precise terms of the capital provision, and its treatment under National accounting rules would be a matter for consultation with Eurostat.
