Dáil Éireann Debate, Wednesday - 21 March 2012
96 Deputy Pearse Doherty asked the Minister for Finance if he will provide a table of the State’s Exchequer deficit, general Government deficit and structural deficit, real and projected, from 2000 to 2020 expressed as a percentage of GDP and in monetary terms. [15863/12]
View answerThe Exchequer and General Government information requested by the Deputy is set out in table 2. My Department's current forecast horizon extends to 2015 meaning that projections for the years beyond this are not available at this time. The 2000-2009 Exchequer balance figures are taken from the September 2011Budgetary and Economic Statistics publication. The 2010 figure is from the 2010 Finance Accounts. The 2011 figure is taken from the end-December 2011 Exchequer Statement. The projections for each of the years 2012 to 2015 are taken from Budget 2012.
The General Government balances for each of the years 2000-2006 in table 2 are taken from the website of the Central Statistics Office. For the years 2007-2010, the figures are taken from the November 2011 Maastricht Statistical Returns to Eurostat. The General Government balances provided for the years 2011 to 2015 are the Budget 2012 projections. An updated estimate of the 2011 General Government balance outturn will be submitted to Eurostat as part of the Maastricht Returns at the end of March and subsequently published in April.
For the years 2000 to 2010, the nominal GDP figures published by the CSO in the 2010 National Income and Expenditure Accounts are used to express the Exchequer and General Government balances as a percentage of GDP. For the years 2011 to 2015, the nominal GDP forecasts contained in Budget 2012 are used. Regarding the structural balance, Budget 2012 provided estimates of the structural deficit for the period 2011 to 2015. For ease of reference, these are given below in table 1. Like all estimates, they will be updated periodically as we go forward. The Deputy will recall that there are inherent difficulties in estimating the structural balance, especially for a small open economy such as Ireland’s, and that, consequently, there is considerable uncertainty surrounding all such estimates. In my response to a previous Parliamentary Question from the Deputy (number 9455/12), I outlined the methodology used to derive the Budget 2012 estimates of the structural deficit. Using this same methodology, my Department has estimated the structural deficit for the years 2008 to 2010. These estimates, which were given in response to PQ no. 4660/12, are also set out in Table 1:
|
Year |
Structural deficit (% of GDP) |
|
2008 |
6.7 |
|
2009 |
9.9 |
|
2010 |
9.9 |
|
2011 |
8.6 |
|
2012 |
8.0 |
|
2013 |
7.1 |
|
2014 |
5.3 |
|
2015 |
3.7 |
97 Deputy Pearse Doherty asked the Minister for Finance if he will provide a table of the State’s financing needs for 2013, 2014, 2015, 2016, 2017 and 2018, respectively, including dates on which sovereign bonds are due to mature. [15864/12]
View answerThe most recent Exchequer deficit estimates for the years 2013-2015 were presented in Budget 2012 last December. They are also set out in the table below. There are presently no official Exchequer deficit estimates for the period post 2015. The National Treasury Management Agency (NTMA) advises me that a list of outstanding Irish Government bonds can be accessed on its website. Outstanding Irish Government bonds due to mature over the period 2013-2018, as well as the dates on which those bonds are due to mature are set out in the table below. There are presently no outstanding Irish Government bonds due to mature in 2017. This data reflects the position as at 29th February 2012.
|
€ billion |
Exchequer Deficit |
Irish Government Bond Maturities (maturity date) |
IMF/EU and Bilateral Facilities |
|
2013 |
14.1 |
6.0 (18/04/2013) |
— |
|
2014 |
10.2 |
8.3 (15/01/2014) |
— |
|
2015 |
7.0 |
3.5 (18/02/2015) and (18/08/2015) |
6.9 |
|
2016 |
— |
10.3 (18/04/2016) |
6.0 |
|
2017 |
— |
— |
2.6 |
|
2018 |
— |
9.3 (18/10/2018) |
6.5 |
It should be noted that it is assumed that short-term borrowings from the EFSF which are due to mature in 2012 will be rolled over. These are not included in the table.
98 Deputy Pearse Doherty asked the Minister for Finance if he will provide a table detailing the total debt currently held by the State; the dates on which this debt matures; to whom the debt is owed; and if he will distinguish the portion of this debt that is related to the banking crisis and debt accrued for the purposes of running the State. [15865/12]
View answerThe Deputy should be aware that the data contained in this response, which has been supplied by the National Treasury Management Agency (NTMA), relates to the outstanding level of National debt. At end-February 2012, it stood at €121.2 billion, as shown in the table below. National debt is essentially the debt of the Exchequer and is a subset of General Government debt which is the measure of the total debt of the State used for comparative purposes across the European Union. In addition to the National debt, General Government debt also includes the debt of central and local government bodies and other entities classified within Government as well as the Promissory Notes issued to a number of financial institutions as a means of providing State support to these institutions. General Government debt is reported on a gross basis and does not allow for the netting off of outstanding cash balances whereas the National debt is a net measure which does. Figures in relation to the outstanding level of General Government debt at end-2011 are presently being compiled by my Department in the context of the submission of the Maastricht Statistical Returns to Eurostat at the end of March. These Returns will then be published on my Department's website in mid-April.
|
Year |
Irish Government Bonds |
Other Medium and Long Term Debt |
IMF/EU and Bilateral Facilities |
Short Term Debt |
Cash and Other Assets |
State Savings |
Total |
|
2012 |
5,563 |
5 |
1,466 |
4,833 |
(23,070) |
1,180 |
(10,023) |
|
2013 |
6,028 |
0 |
0 |
3 |
0 |
1,180 |
7,211 |
|
2014 |
8,327 |
0 |
24 |
0 |
0 |
1,180 |
9,532 |
|
2015 |
3,537 |
66 |
6,901 |
0 |
0 |
1,180 |
11,684 |
|
2016 |
10,308 |
0 |
6,035 |
0 |
0 |
1,180 |
17,524 |
|
2017 |
0 |
0 |
2,624 |
0 |
0 |
5,902 |
8,526 |
|
2018 |
9,256 |
0 |
6,524 |
0 |
0 |
0 |
15,780 |
|
2019 |
14,467 |
0 |
3,580 |
0 |
0 |
0 |
18,047 |
|
2020 |
19,567 |
0 |
2,624 |
0 |
0 |
0 |
22,191 |
|
2021 |
0 |
0 |
5,024 |
0 |
0 |
0 |
5,024 |
|
2022 |
0 |
0 |
3,269 |
0 |
0 |
0 |
3,269 |
|
2023 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
2024 |
0 |
217 |
0 |
0 |
0 |
0 |
217 |
|
2025 |
8,284 |
0 |
0 |
0 |
0 |
0 |
8,284 |
|
2026 |
0 |
0 |
2,000 |
0 |
0 |
0 |
2,000 |
|
2027 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
2028 |
0 |
230 |
0 |
0 |
0 |
0 |
230 |
|
2029 |
0 |
50 |
0 |
0 |
0 |
0 |
50 |
|
2030 |
0 |
105 |
0 |
0 |
0 |
0 |
105 |
|
2042 |
0 |
0 |
1,500 |
0 |
0 |
0 |
1,500 |
|
85,337 |
673 |
41,573 |
4,836 |
(23,070) |
11,803 |
121,151 |
Source: NTMA.
Rounding may affect the totals.
*Notes to the Table:
1. It should be noted that the figures in the table are unaudited figures and include the effect of currency hedging transactions.
2. It is assumed for the State Savings products included in the National debt (Savings Bonds, Savings Certificates, National Instalment Savings, National Solidarity Bonds and Prize Bonds) that 10 per cent of the total outstanding at the beginning of the period matures each year for the next five years with the final 50 per cent maturing in the sixth year.
3. State Savings also include moneys invested by depositors in the Post Office Savings Bank (POSB). These funds are mainly lent to the Exchequer as short term advances. Taking into account the POSB, total State Savings outstanding are €14.3 billion.
4. Short-term funding of €1.5 billion under the EU/IMF Programme maturing in 2012 is due to be replaced by longer term funding.
The figures in the table above relate to the National debt as of 29 February 2012, broken down by year of maturity. Of the €121.2 billion outstanding, €11.8 billion was borrowed from domestic retail investors in Ireland under the State Savings schemes operated by the NTMA, €41.6 billion was borrowed under the EU/IMF Programme and the balance is mainly Irish Government bonds sold on the international capital markets. Because of the mechanisms by which Government bonds are issued and traded, it is not possible to identify the holders of this portion of the debt.
In relation to banking recapitalisation related debt, the Deputy should be aware that there was no specific tranche of borrowing that was undertaken solely for the purpose of funding payments to banks. Rather, the funds which the State has access to as a result of borrowing undertaken by the Exchequer, are available, along with the funds sourced from revenues such as tax revenue, non-tax revenue and capital receipts, to fund overall expenditure, including the recapitalisation of the banks. It is the case however that in the absence of the requirement to provide capital support to the banks, the Exchequer deficits and therefore the State's borrowing requirement and debt levels would have been lower.
In relation to bank recapitalisation related transactions that were funded from the Exchequer, in 2009 the Exchequer funded a €4 billion capital injection into Anglo Irish Bank. Also, in 2009 there was a frontloading of the 1% of GNP Exchequer contribution to the National Pensions Reserve Fund (NPRF) for 2009 and 2010 to part-fund the recapitalisations of Allied Irish Bank (AIB) and Bank of Ireland (BOI) announced in February 2009. The total sum transferred from the Exchequer to the NPRF in 2009 was €3 billion. Both AIB and BOI were recapitalised by way of a €3.5 billion capital injection in the form of Preference Shares in each institution with all of that capital provided from the NPRF. Generally speaking, transfers from the NPRF do not impact the Exchequer, are not therefore deemed borrowings and do not form part of the National debt.
In 2010, the Exchequer provided €625 million to Educational Building Society (EBS) and €100 million to Irish Nationwide Building Society (INBS) by way of special investment shares. This method of investment gave the State extensive powers and full economic ownership of the two building societies.
During 2010 also, capital injections totalling €30.85 billion were committed to Anglo Irish Bank, INBS and EBS. The respective amounts were €25.3 billion for Anglo Irish Bank, €5.3 billion for INBS and €250 million for EBS. The consideration for the capital injections were Promissory Notes issued by the Exchequer to the institutions in lieu of cash. These notes will be redeemed over a period of several years with the Exchequer committed to making annual repayments of 10% of the initial capital value of the notes. This means the Exchequer did not require upfront cash funding for the capital injection. While the €30.85 billion in Promissory Notes were added in full to the stock of General Government debt from the date they were issued in 2010, they only impact the National debt as the annual instalments are paid. In other words, the National debt was only affected by the Promissory Note payments for the first time in 2011, when the Exchequer provided a combined €3,060 million to Anglo Irish Bank and INBS — now known as Irish Bank Resolution Corporation (IBRC) — and €25 million to EBS.
Finally in relation to 2010, a further €3.7 billion was injected into AIB in return for ordinary shares. This capital was provided from the NPRF and did not therefore impact the National debt.
In July 2011, the Exchequer funded €7,568 million of the payments for the recapitalisation of the banking sector, which followed from the March 2011 PCAR process. €2,700 million was provided to Irish Life & Permanent (ILP) in return for ordinary shares and contingent capital notes,
€985 million to BOI in return for contingent capital notes and €3,883 million to AIB by way of a capital contribution and contingent capital notes. Offsetting this cost somewhat were the €1,018 million in capital receipts transferred to the Exchequer from the NPRF from the sale of part of the State's shareholding in BOI and €46 million in fees related to the recapitalisations. This resulted in a net Exchequer contribution of some €6.5 billion towards the recapitalisation of the banking sector in 2011, thus adding to the National debt. The Budget 2012 Exchequer deficit estimate for 2012 made provision for €1.3 billion in Exchequer funding to complete the recapitalisation of ILP through the acquisition of its life assurance subsidiary, Irish Life, by the State in June 2012.
